Category: Free Essays

In October 2010, the city of Shanghai successfully held the World Exposition, with an accomplishment of participants coming from 246 countries, and more than 70 million visitors (Xinhua, 2010). There were many preparations made prior to the event, including constructing the buildings, transportation, accommodation for world wide visitors, and training service providers with better services. As holding international large-scale conventions and exhibitions will attract international guests and will boost the economy locally, the value-added brought by the events can also influence tourism industry with the service quality, and the influence will take effect even after the event is over. The current research is interested in the effects of convention and exhibition industry on service quality, as World Expo 2010 Shanghai just finished, it is suitable for collecting data concerning this topic.

The convention and exhibition industry is one of the most important and fastest growing industries in the 21st century. It is often categorized with meeting, incentive travel together as the meetings, incentive travel, conventions and exhibitions (MICE) industry. With its gaining popularity, it has grown as a significant market segment over the past decades (Astroff & Abbey 2006; Kim, Chon & Chung 2003). MICE industry not only brings a destination with strength and development in their competitive advantage, but also enhances the image of the destination, and economic benefits for the destination and community (Opperman 1996).

According to the International Meeting Statistics by the Union of International Associations (UIA), 11,423 international meetings were held in 2008 worldwide (UIA, 2009). The industry consists of multi-sectors of hospitality service including lodging, food and beverage, catering, convention service, convention facility supply, transportation, tourism, retail, and entertainment (Astroff & Abbey 2006). And the benefit to local economy is huge. With U.S. Travel Association’s (2009) estimation, the MICE industry contributes $101 billion in annual spending, and provides $16 billion in tax revenue, and creates one million jobs. As for Singapore, every dollar generates by the MICE industry adds another 12 dollars to the national GDP (International Enterprise Singapore 2001). As the case in China, which is one of the most populous countries in the world, reports indicated that during the Kunming Expo 1999, the international horticultural fair, ticket revenues were 100 million RMB ($12 million), and it has brought 170 million RMB ($20.5 million) ticket revenues to the hospitality industry (China Research and Intelligence 2009). The development if convention and exhibition economy also provides more job opportunities, marketing, infrastructure and service quality.

Service Quality

Service quality has been an important attribute in the service industry; it is defined as the consumer’s judgment about an entity’s overall excellence or superiority (Parasuraman, Zeithaml & Berry 1988). It affects customer satisfaction, and it is one of the critical factors to business survival and competitiveness in the service industry. In previous researches, the efficiency and accuracy to measure service quality has been the main focus (Ladhari 2008). Parasuraman, Zeithaml and Berry (1988) conducted the most influential studies on service quality, which was developing the SERVQUAL instrument. The SERVQUAL instrument concluded five dimensions: tangibles, reliability, responsiveness, assurance and empathy. This instrument has become the foundation of service quality measurement instrument in a variety of industries, which compares between customer expectation and realized performance of specific service.

Tsang and Qu (2000) on the other hand, adopted from several studies and indicated the 5 gaps of service quality. They describe the gaps as the difference between expectations and perceptions. The management perceptions of customer expectations and service quality specifications, the difference between service quality specifications and the service actually delivered, and the service delivery and what is communicated about the service to customers, these gaps affect the actual delivery of service. And the difference between customer expectations of service quality and customer perceptions of the actual performance affects customer perceptions of service quality, which is what this research would like to find out.

World Exposition

The World Exposition, or called World Fair, Universal Exposition, Expo, is a form of large public exhibitions held in different parts of the world. The first Expo was held in 1851, in Hyde Park in London, United Kingdom. It was the first international exhibition of manufactured products. It was the idea of Queen Victoria’s husband, and it influenced the development of many aspects in the society (Findling & Pelle 2008, pp. 13-14). Since then, the World Expositions have attained increasing prominence as grand events for economic, scientific, technological and cultural exchanges, serving as an important platform for displaying historical experience, exchanging innovative ideas, demonstrating esprit de corps and looking to the future.

The World Expo 2010 Shanghai is the first Expo to be held in a developing country, the theme is “Better City, Better Life.” Because nowadays, 55% of the world population lives in a city, the Expo sets out to explore the full potential of urban life in the 21st century, and display urban civilization, exchanging experiences of urban development, explore new approaches to human habitat, lifestyle and working conditions in the new century, also learn how to create an eco-friendly society and maintain the sustainable development of human beings. It is held from May 1st to the end of October in 2010, spanning six months (Expo 2010 Official Website 2008).

Visitors to Shanghai

As the Expo brought over participants coming from 246 countries, and more than 70 million visitors (Xinhua, 2010), there is also a boost in tourism and numbers of travelers in Shanghai, both domestic and international. A statistic data gathered from the Shanghai Municipal Tourism Administration is given in Table 1. As shown in table 1 and the total number of visitors in Figure 1, there’s a big leap in year 2010, which the Expo took place.

Table 1. Visitors to Shanghai

Year

2006

2007

2008

2009

2010

Domestic

4,646,303

5,200,981

5,264,727

5,333,935

7,337,216

Hong Kong

314,871

322,351

363,247

415,478

623,969

Macau

16,448

17,363

15,575

17,816

40,043

International

3,997,979

4,426,148

4,416,223

4,390,495

5,931,211

Total

8,975,601

9,966,843

10,059,772

10,157,724

13,932,439

Source: Shanghai Municipal Tourism Administration

Figure 1. Total Visitor to Shanghai from 2006 to 2010

Hotels in Shanghai

Shanghai is one of the most visited cities in China, according to the statistics from Euromonitor research and China Bureau of Statistics, the market size of travel accommodation in China in year 2010 reach sales of RMB 510.8 billion ($78.2 billion) (Euromonitor International 2011). According to the report, the regional hotel parameters in 2010 indicate that Shanghai has the highest occupancy rate among all other municipal or provinces, as shown in Table 2.

Table 2. Occupancy rate For Travel Accommodations in China

Destination
Travel Accommodations
Occupancy rate %

Anhui

3102

50

Beijing

5182

69.4

Fujian

5024

60.1

Guangdong

6422

67.1

Guangxi

4903

53.2

Hainan

2167

59.8

Hebei

2983

49.1

Henan

2668

50.4

Jiangsu

5544

59.8

Shaanxi

3882

55

Shandong

5149

50

Shanghai
4410
70.7

SiChuan

2311

58.9

Tianjin

1973

54.2

Yunnan

3763

52

Zhejiang

5606

56.7

Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

As for a more detailed statistic for Shanghai, data retrieved from Shanghai Municipal Tourism Administration is shown in Table 3, and the occupancy rates for total travel accommodations is shown in Table 4 and Figure2. The statistics suggests that the occupancy rate for accommodations in Shanghai experienced a growth between 2009 and 2010. Although the occupancy rates for Table 2 and Table 3 are slightly different, due to the differences is samples, numbers in Euromonitor International (2011) studies are narrowed to certain hotel chains, however it still indicates the market size in Shanghai is greater than other destinations in China.

Table 3. The Occupancy Rate for Hotels in Shanghai

Year

2006

2007

2008

2009

2010

?… Occupancy

64.24

61.35

56.53

52.68

67.22

Source: Shanghai Municipal Tourism Administration

Figure 2. Occupancy Rates of Hotels in Shanghai

Conceptual Map

With the review and statistics presented above, we can infer that the 2010 World Expo Shanghai has brought more visitors to Shanghai, and helped increased the occupancy rate. Supposed there are more people visiting Shanghai due to the Expo, accommodation demands raise and the demand for service quality should also rise. The conceptual framework of this study is depicted in Figure 3.

Convention and Exhibition Industry

Total Visitors to a Destination

Hotel Service Quality

Figure 3. The Conceptual Framework

The convention and exhibition industry will influence the total number of visitors to a destination, weather they are participants to the event or guests and tourists. This link is already shown and proven in the data provided above, therefore, with more visitors coming to the destination, demands for accommodations will rise, and that will in turn influence the service quality in the hotel sector. According to the research questions and framework, the hypothesis for this study is formed:

Hypothesis 1: World Expo 2010 significantly influenced the number of visitors to Shanghai.

After examining the influence on increase in visitors to Shanghai, I would like to know if the increase in visitor numbers influences the service quality in the hotel sector, therefore:

Hypothesis 2: Increased visitors to Shanghai positively influenced the service quality in hotel sector.

If Hypothesis is also supported, then I would like to examine if the effects on service performance will keep on taking effect, or if there is no difference between service quality compared to before, or the quality will even drop, therefore:

Hypothesis 3: The increase in service quality in hotel sector will remain after the World Expo 2010 is finished.

Research Question

The aim of this study is to answer the questions of whether the convention and exhibition industry brings benefit to a destination, and will the industry influence the service quality. Not only during the event, but also after the event, the total quality for service industry will increase. Therefore, the research questions I set out to answer are: – Will convention and exhibition industry bring more visitors to a destination?

– Will more visitors influence the service quality for hotels?

– After the event, will the influence still carry on?

Research Design

Due to the aim of this research, I try to discover the differences between service qualities before the Expo 2010 and after, the research will adopt a time series design. However it would be impossible to gather data prior to the Expo by myself, but I can reference past research on service quality in the hotel industry in China from previous studies and researches. Drawn from a research done by Tsang and Qu (2000), I will have a reference of the service quality done in year 2000, and then I will be able to compare the results done today and later.

Sample

To understand the hotel service quality provided in Shanghai, the current research targets at international guests that visits Shanghai, I will use a convenience sampling method, questionnaires will be distributed to guests in a hotel chain. Also a systematic sampling method will also be used, which every 5th visitor checking in will be asked to do the questionnaire. This will also be similar samples to the previous study done by Tsang and Qu (2000).

Instrument

In this research I adopt the instrument developed and used by Tsang and Qu (2000). They adopt the questionnaire from SERVEQUAL and other research, and developed the questionnaire in 3 parts, with 35 service quality attributes. The first part is to measure the respondent’s expectations regarding service quality in the hotel industry, they will be asked to fill in the level of importance of statements with responses, from a 5-point Likert’s scale, ranging from (1) very low expectation to (5) very high expectation. The second part of the questionnaire is designed to examine the respondent’s perceptions of service quality actually provided during the stay. Also, the respondents were asked to indicate their level of agreement with statements with responses from a 5-point Likert’s scale: (1) strongly disagree to (5) strongly agree. The third part of the questionnaire collects the demographic and classification questions of the respondent. The 35 attributes are listed as below:

Gap mean differences between managers’ perception of tourists’ expectations and tourists’ expectations of service quality in the hotel industry

Attributes

1. Comfortable and welcome feeling

2. Neat appearance of staff

3. Professionalism of staff

4. Hotel staff with multi-lingual skills

5. Friendliness and courtesy of staff

6. Special attention given by staff

7. Availability of staff to provide service

8. Staff performing the services right the first time

9. Reservation system was easily accessible

10. Quick check-in and check-out

11. Cleanliness of room

12. Quietness of room

13. Security of room

14. Attractive decor, furnishings of room/lobby

15. Comfortable mattress and pillow

16. Reasonable room rate/value for money

17. Variety of services offered

18. Reliable message and wake-up service

19. Provision of accurate and reliable information

20. The guarantee of reliable service

21. Availability of room service

22. Prompt breakfast service

23. Elegant banquet service

24. High quality of food in restaurant(s)

25. Variety of drinks and wine list

26. Reasonable restaurant/bar prices

27. The high degree/level of hygiene of food

28. Up-to-date and modern facilities

29. Adequacy of fire safety facilities

30. Availability of eating and drinking facilities

31. Availability of year-round swimming pool

32. Availability of business center facilities

33. Availability of sauna and health club

34. Availability of conference/meeting room

35. Convenient hotel location

Data Analysis

Descriptive statistics analysis was used to understand the demographic information about the respondent. Each of the categories will be calculated and described in the descriptive statistics section. In order to understand the correlations between variables, a correlation analysis were conducted on all basic data such as gender, age, experience, educational level, marriage status and the scores of the scales. To investigate the service quality gaps, a paired t-test will be used to evaluate the service quality.

Conclusion

The expected results for this research will be there are positive relationship between visitors to Shanghai positively influenced the service quality in hotel sector. As the visitor numbers already increased during the period of the Expo, the hotel occupancy rates are also higher. With more people check into the hotels, hotel managers pay more attention to the service quality, in order to deliver better guest service. Also, it is expected that the increase in service quality in hotel sector will remain after the World Expo 2010 is finished.

There are several limitations of this research. First with the time series design, the differences in sampling and long time between the two time periods will cause some confounding. Since the improvements in infrastructure in Shanghai may also influence service quality, this is something we cannot eliminate. Second, travelers to the hotels will be different from the first sample, we can compare the demographic data between the two, trying to match the samples, however there are still unparallel between the two. For future research suggestions, we can collect the data again 5 years after the Expo, to find out weather the service quality keeps the same as the period right after the Expo. We can also get an idea of how hotel managers improve their service quality by interviewing them, with can reveal some more detailed facts on how the Expo really affect their business.

Analyze the impacts of issues and trends that drive change in the travel and tourism sector

Due to the current trends and issues causing change in the travel and tourism sector, the businesses have to adapt to the changes and redesign their products and services. Many changes brought by globalization, technology, world political changes, economics changes and people attitude towards tourism have reshaped the industry altogether. The impacts of these trends and changed can be described below in the context of a major tourism brands.

Due to the ageing of the population tourism, businesses are bound to hire older workers. Young people are more qualified and not willing to join the industry due to poor working conditions. Older people are less mobile and more demanding which will have impacts on wage rates and other costs to maintain staff.

Lifestyles of the people have changed and their attitude towards tourism services has changed a great deal. People are more demanding and more price conscious now. Firms must cut costs and their profits in order to survive in a more competitive environment now.

Technology have helped businesses cut down costs as it has enabled management to manage their resources efficiently and have reduced spare capacity. The increased use of telephone, 3G mobile and internet has helped consumers to access information regarding prices and value for money. This has resulted in a more intense competition. Hotels are responding to the situation by recruiting staff that have skills in information and communication technology.

Outsourcing is a key phenomenon in the modern tourism industry. Different products esp. food is obtained from other producers and it’s hard to explain the origin of the food to consumers plus it puts an extra push on the costs involved.

Globalization has not only benefited the tourism industry in terms of more revenue and clients but it has also been a sole reason for cheap & skilled labor. Skilled labor from poorer regions can be attracted to the industry at relatively cheaper rates which would result in lower employment cost for hotels and catering industry. Globalization also provides this wonderful opportunity to exploit economies of scale. Globalization can cause homogenization in services which might not be good from the customer’s perspective but brand names do ensure higher product quality.

Skills gap in the industry is adversely affecting the quality of services. Firms are in a position to charge prices of their own choice in such circumstances. However companies are finding a solution to the issue by providing on-job trainings or paying handsome wages to skillful workers and thus attracting more customers. However the wage rates are mostly affected by the local economic and industrial condition and educational level of the locality as well.

Hotel industry is greatly affected by the changes in law as well over the last few years. There is a strong emphasis on working time regulations, minimum wage laws and other working conditions regulations. Laws banning smoking in public places and restaurants etc. are also have impacts in the tourism business. Hotels are now seeking cost effective labor and are more into application of technology.

Government and other regulatory authorities are putting more and more pressure on catering firms now to take great care of hygiene and other food related issues. Greater awareness among the consumers related to diet and health have forced the catering businesses and restaurants to reduce the use of sugar and salt in their food. Due to the increased number of obesity cases, consumers are more conscious about the fats and calories rather than just taste. Customers want to know about the origin of the food as well. There is increased food labeling and more information is provided and displayed for the customers regarding the food and its ingredients. There is a great demand for food to be produced in a socially responsible way and this is helping in promoting good practices in the industry.

The tourism industry faced a serious setback after the incident of 9/11. The US war on terror and the Iraq war changed the entire industry all together. Many incident s of attacks on tourists, kidnapping for ransom and other political gains were witnessed which created a sense of insecurity among the tourists. Many countries and regions were declared unsafe for tourists. Apart from US, many other cities in Europe and UK were also the victims of terrorism. Madrid and the London bombing somehow created this perception among the tourists that EU member states were the targets of the terrorists. The impact of this is likely to be long term as it will take a long time to restore the confidence of the tourists. Due to this lack of confidence the tourism industry has lost a lot of business and there is a serious decline in investment in this sector. Working conditions have deteriorated and level of employment is showing a downward trend.

4.2 Discuss the likely consequences of businesses failing to respond to market changes

Many different businesses are facing many changes in the market. Such changes are economic, social, political and behavioral changes. Tourism industry is not an exception either. Over the last couple of decades the tourism industry has seen a tremendous amount of change and companies are always advised to adapt to these changes. Appropriate strategy and planning can make a company successful and make these changes as an opportunity rather than a threat. However, companies which are not being able to respond to these are likely to face many different failures and problems which are described below.

Loss in Sales & Revenues

Companies which are unable to respond to changes in the market, they are most likely to lose customers and revenues. Due to increased competition and market forces, tourism businesses are bound to charge a low price and earn little profit margin so any failure to adapt to market changes are most likely to cause losses financially.

Technology can save a great deal in this regard. Technology not only helps the industry to market their products but also helps in the reduction of labor costs. Different computer applications have made it possible to access and receive information and help in decision making process. A company is most likely to suffer a great deal if it’s unable to adapt to these technological changes.

Loss of Competitive Edge

As a famous saying goes “competition improves services”. Tourism industry is facing a strict competition and different businesses related to the industry are bound to cut down costs and still provide best quality services. By the proper change management strategy, businesses can obtain competitive edge over other competitors. The proper use of technology, hiring the skilled labor and other value added services can not only attract more customers but also be a cause of more market share. Failure to adapt to these trends and changes can be a reason of loss of competitive edge.

Loss of Goodwill

A business is most likely to damage its reputation in case of failure to adapt to changes and recent trends. A tourism business unable to provide valued services to its customers at reasonable price is surely going to lose its customers. Recent trends have shown that customers are most into green products and the hotels and catering industry are affected by this change a great deal. Hotels are expected to operate in an environment friendly manner and promote green practices. However if the businesses are unable to adapt to this, they are going to lose face in this changing market.

Regulatory Issues

Hotels, restaurants and catering businesses are bound to provide information regarding its products due to increased awareness among customers regarding food and its contents. Products labeling esp. in case of the catering industry has changed a great deal due to this trend. On the other hand there are now more regulations and laws related to the food industry. Use of some chemicals and other ingredients in the food products are banned. Smoking in restaurants and public places is not allowed. Similarly food businesses are properly inspected and regulated now.

If restaurants and catering businesses do not take into account all these factors they might be facing some serious regulatory actions in many cases. There are some cases recently where the customers have sued the hotels and restaurants for food related issues. Government regulatory authorities also keep a check on this industry so any negligence in this aspect can be a cause of some serious consequences as well.

Growth Issues

A company will not be able to grow and expand its business if it is unable to adapt to changes and trends. Tourism businesses must hire human resource with good knowledge of the technology and customers service needs. Use of the technology and skillful labor helps in cutting down costs. Companies in tourism industry must also work in an environment & social friendly manner because consumers are more aware and conscious now regarding environmental and social issues. They prefer to go for green products and thus can provide a competitive edge to the business. Failure to adapt to these changes and trends will result in decline in the revenue and thus growth will not be possible.

References:

http://www.tourismandmore.com/tidbits/confronting-change-in-the-tourism-industry/

http://www.tourismandmore.com/tidbits/why-tourism-industries-fail-part-1/

Ibis is Europes leading budget hotel with more than 950 hotels in 55 countries; ibis offers its customers the highest level of service and ultimate comfort in its category at the best market prices. The ibis standard guarantees its customers around the world offer homogeneous: a modern room, connected and soundproofed bedding to innovative comfort, breakfast from 4am to noon and a varied cuisine.

In this ultimate comfort the ibis room: became modern, comfortable and fully equipped, all hotels in the network, the ibis room is designed to offer its customers a happy sleep and the ability to work calmly: soundproof, connected to the Wi-Fi hotel, with a flat-screen LCD TV, a spacious bathroom and a work desk.

New bedding to comfort Ibis, happy sleep specialist, has developed a concept of innovative and revolutionary bedding. The pillows are generous, welcoming duvet and mattress adapts perfectly to your body for a deep, restful sleep. And the secret weapon of ibis a mattress 7 cm more comfort for soft sensations. Unprecedented in the economy segment, the new ibis will change your bed nights.

The highest level of service in its class c is enjoy your stay cloudless day and night, our teams are at your disposal Our teams live to the rhythm of your needs and your desires: Front 24h/24, small kitchen ibis at all times and a bar service open continuously.

A commitment to quality service

Ibis is the first hotel brand to receive economic since 1997, the ISO 9001 quality certification. This International Standard deals with the quality service day and night reception, accommodation, small kitchen ibis, and breakfast from 4am to noon and bar service. Today, 758 ibis hotels in 21 countries are certified ISO 9001 or 84% of the network.

The contract Satisfaction 15 minutes

“Contract Satisfaction 15 minutes” is a unique example of this demanding process. If a cloud disturbs the residence of a client, ibis teams give 15 minutes flat for a solution, day and night, and if they cannot hunt that little cloud in the allotted time, the client is invited by the hotel.

Ibis pioneering environmental commitment

Ibis registered its commitment under PLANET 21, the program of Accor’s sustainable development. Ibis is the first global chain engaged in the environmental certification ISO 14001 which installs a continuous progress via: a recent on-going compliance regulations continuous improvement: hotels certified are regularly audited to set new goals. Already 420 hotels in 18 countries have achieved ISO 14001 environmental certification.

SEVEN P S

PRODUIT: The ibis standard guarantees its customers around the world offer homogeneous: a modern room connected and soundproofed bedding to innovative comfort, breakfast from 4am to noon and a varied cuisine, Attentive and efficient.

PRICE: According the price of ibis is one of the major determinants of the profitability of the hotel, and the price also depends on which city the hotel is situated, so Ibis Greenwich is little be expensive because of the activity and the advantage that the around him.

PLACE: Ibis Greenwich is located in a very charming and cute town, and is located in the heart of Greenwich, near the Maritime Museum, Cutty Sark, and Royal Observatory and the train station

PROMOTION: regarding the promotion hotel ibis create a new concept where you reserve 2 nights with Ibis styles every Tuesday and you pay for just 1 night, you can book to in last minute.com you will have possibility to get 50% every week end Friday and Saturday.

PEOPLE: The Ibis Greenwich has a very friendly receptionist staff and very harsh reception of this profession the qualification requires is GCSE or LEVEL and is depend for which brand or star are you working if you don’t have any qualification but you have a motivation for the trade of the Ibis hotel industry hotel will propose you evaluation of training to evolve a team leader to manager.

PROCESS: all Ibis customer use internet to book or do they are rooms reservation or, send of Email or calling the line reservation for and all our reservation agent will reply to the customer by email, fax, or post.
PHYSICAL EVIDENCE: the hotel is clean, the rooms are clean, quiet, well heated hotel, the staff are presentable and pleasant
http://books.google.co.uk/books?id=zFfo2MGH90gC&pg=PA41&source=gbs_toc_r&cad=4#v=onepage&q&f=false
analysis of the Micro and Macro Environment of hospitality marketing
THE MACRO ENVIRONMENT

Economy: Consumers spending on hospitality services are discretionary spending. The share of household budgets spent on food away from home declined slightly during the recession of the early 1990s (Putnam and Allshouse 1999).

Society and culture: As social and culture values, beliefs, and opinions change, opportunities are created for new products, services, and concepts. As people become more concerned about second-hand smoke, more restaurants, even in states where a complete smoking ban is not required, have become completely smoke free, Hotel also provide non-smoking rooms or floors in response to the contemporary climate of the social environment.

Political: the restaurants restaurant industry continues to experience pressure from the government, to improve nutritional labelling or menus.at the state and local levels, destination marketing agencies, such as state tourism offices and convention and visitors, play an important role in building sales for the hospitality industry.

Technology: the greatest impacts of technology on hospitality operations are in the area of communications and the amount and quality of information available for example computers are used to keep track of a guest’s history on spending, Hotel offer automatic check in and check out etcaˆ¦

Environment: Many hospitality organisations have implemented environment friendly programs like many restaurant serve water only on request, and hotels ask guests to keep towels on the rack if they will be used again so that they will not be washed unnecessarily.

The micro environment

Competitors the market place for independent operations is much more competitive than it was just a few years ago. The high degree of competition in both the hotel and the restaurant segments affects pricing strategies and all other elements of the marketing mix. And the relatively fragmented nature of the industry means that the environment will remain highly competitive and unpredictable.

Customers: families are important to hospitality marketers for two reasons
PESTEL POLICAL ECONOMIC SOCIAL TECHNOLOGY environment legal

Political The political scene has an enormous influence on the regulation of businesses, the purchasing power of buyers, as well as related companies for this reason, we had to take a look at many criteria policy so that companies can grow and perspective is rather a healthy atmosphere.

Economical Marketers need to consider the state of a trading economy in the short and long terms. This is especially true when planning for international marketing.

Social and cultural the social and cultural influences on businesses vary from one country to another. It is very important that such factors be considered. What is the dominant religion, what are the place of men and women within the society, what are the reactions when coming to foreign products and services? In the hotel industry the sociological aspects of UK have not really affected the business; UK is a rather open minded country and therefore is easy going for the hotel business.

Technological Technology is vital for our competitive advantage, and is a major driver of globalization technology offers companies a new way to communicate with their consumers. With development of internet, most of the bookings are made via internet. Finally technology allows for products and services to be made more cheaply and to a better standard of quality.

Environment: PLANET 21 is our 21 commitments to sustainable development. Health, nature, carbon, innovation, local development, employment and dialog: 21 commitments to help the world run a little more smoothly.

Legal: these are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms’ behaviour.

Opportunities
Development of skills, career opportunity Evolution of poste to another like (the manager at reception), possibility to travel around the world
IBIS HOTEL SWOT
STRENGTH
Located in the heart of Greenwich
Near the Maritime Museum, Cutty Sark,
And Royal Observatory
And train station.
The rooms offer satellite TV and internet access.
Relax at the bar with a coffee or a glass of wine
Let your self be tempted by the snacks and light meals that are offered.
Increase the twin rooms
Threats
There is strong competition in the market, opening of smaller hotel, and client requests a very high qualification
Weaknesses
The hotel charged me for twice for the same room on the same night, claiming I did not show up for the second of the…
I could not park at the hotel, the two extremely miserable receptionists offered me the ?10 parking permit which would enable me to park…
Tiny rooms uncomfortable beds
PORTERS FIVE FORCES

According to Porter (2001) the internet is an enabling technology that can be used within the context of a good business strategy in any industry. The five forces that impact competitiveness which are outlined in Porter’s 1980 work are: barriers to entry, threat of substitutes, bargaining power of buyers and sellers, and the rivalry among existing competitors. The most important determinant of a marketplace’s profit potential is the intrinsic power of buyers and sellers.

Threat of Substitute Goods

In the hotel industry there is usually another hotel just around the corner. They appear in all price ranges, with varying levels of service and amenities.

The constant challenge will always be to get the guest to choose your hotel over the competitor. The internet makes the overall market more efficient while expanding the size of the potential market and creating new substitution threats. Given the potency of this threat a superb internet presence is vital.

“Bargaining Power of Buyers Business persons choosing a hotel for business travel are savvy consumers and they are comfortable with computer technology, It has become very simple for them to go online and book a hotel. They no longer need travel agents, corporate travel consultants or middle men of any kind to determine where they will stay. Porter’s model predicts this elimination of intermediaries.

Rivalry among existing competitors

The rivalry among competitors in the hotel industry is fierce. When potential customers can learn about a hotel on line, the internet reduces the differences among competitors. People tend to seek the best price for the best experience and the tendency is to reduce price to be competitive. The internet covers wide geographical areas so the market is widened increasing the number of competitors.

Barriers to Entry

The initial investment in the hotel industry creates quite a barrier to entry but certain barriers to entering the hotel market are reduced by the internet. A presence on the internet reduces upstart marketing costs somewhat, and gives the new competitor access to potential suppliers and resources..

Bargaining power of suppliers

While this is not a substantial threat in the hotel industry it can have impact especially in the area of labour. With an aging population, there are fewer people to fill service industry jobs and hotels which can attract excellent staff have a greater chance of providing excellent and exceptional experiences to their clientele. As part of their internet strategy all hotel chains should have a section on recruitment for employment.

http://themarketplaceoflife.blogspot.co.uk/2011/02/porters-five-factor-model-and-hotel.html
Segmentation and positioning

According to the Ibis website the SEGMENT AND DESIGN is International standardized brand. ROOM SIZE 16/17sqm – Can be customized according to market requirements. BEDDING the bed comfort is one of our utmost priorities. We will be launching a new ‘Ultimate Comfort Bed’. QUALITY Most of the hotels have been ISO 9001 certi¬?ed.

ENVIRONMENTAL FRIENDLY Over 400 hotels in 17 countries have obtained ISO 14001 Environmental Certi¬?cation. Since its creation in 1974, ibis has expanded continuously and has a network of 957 hotels, 117,171 rooms in 55 countries***. This strong global positioning is the result of an ambitious expansion plan launched in 2007.

http://www.accor.com/fileadmin/user_upload/Contenus_Accor/Franchise_Management/Documents_utiles/Developpement/ibis_megabrand_developpement_brochure_022012.pdf
http://www.accor.com/en/brands/brand-portfolio/ibis.html
Branding
An ultimate comfort offer the ibis room: modern, comfortable and well-equipped in every hotel of the network, the ibis room is designed to offer to its guests a happy sleep and the possibility to work calmly: soundproof, connected to the hotel Wi-Fi, with a flat screen LCD TV, a spacious bathroom and a desk.
Brand new bed, brand new comfort Ibis, the good-night’s-sleep specialist, has developed an innovative and revolutionary bedding concept. Pillows are fluffy, the duvet is super-soft and the high-tech mattress aligns with the density points which provide your body, so your sleep will be deep and refreshing. And the ibis secret weapon is a 7cm topper of extra comfort for a soft and welcoming feel. Unique in the economy hotel segment, the new ibis bed will transform your nights.

Recommendation Ibis hotel must focus more on business segment and individual travelled, must change they are design room, also enlarge the lobby space.

Conclusion The success in the tourism sector is not within the reach of everyone, the trade of the hotel industry and catering require certain qualities very Particular. First of all, and contrary to what we tend to believe that carriers are not easy, they are certainly travel, leisure, pleasure, but the majority of jobs are sedentary serious or stressful.

In problems with the Environmental Issues or Laws, with the cooperation of our tourism they develop awareness, concern and knowledge of the environment and its different importance and other things. Those are different laws that have rule in Philippine tourism, including or even the different government office is involved too. It will also provide current situation that have in the tourism, travel and making hospitality which may be analyzed, interpreted and doing what can do on laws that have. The Environment laws protect our natural resources by controlling businesses that have the possible cause to them. Due to the matter of these laws, the Environmental Protection was formed whose main duty that must have done is to control and decrease pollution in finding out some materials that could cause harm, to see that companies that may cause environmental injury, they sets right of practice to lessen environmental effect and to carried punishments for those who did not follow environmental rules.

Therefore, for any industry or in the hotel and tourism, it is helpful to be well known with the matter that given by our environmental laws, and responsible for law that government given, and the kinds of different way and some business through which those environmental laws are need to implement. Tourism or the Hotel Management can have different effects on a given area such as economical, social, environmental etc.The most important economic effect that tourism has is that it provides more employment for the people in that area and hence in a way increases their standard of living. In fact certain economies primarily run on tourism.As a result it also helps the region as a whole to develop and as a result the governing bodies can utilize the funds to promote the destination and make it more attractive for tourists.

Tourism is now one of the world’s largest industries and one of its fastest that is develop in our country. For many countries tourism is seen as a main used for wide development, as it alert to the new different economic performance or activities that have in the government. Tourism may have a positive economic effect on the balance of payments, on employment, on gross income and production, but it may also have negative effects, particularly on the environment. Unexpected things in developing tourism can result in such a worse of the environment that tourist growth can be demanded. Being the major source of tourist product of the government, therefore it should be protected in order to have something development of tourism and doing good for the country in following years.

In additional of business activities worldwide and as a result of more high knowedge , there has been increasing learn to everyone and concern with the injury to human health and environmental damage that cause by the different business activities .These problems is need for business and industry to be controls at all levels, and for the main that could be hardly sustain development to be established in international and national environmental laws to make sure that foreign investment and other business activities lead to development that is sustainable in environment . In this way, the Hotel and Tourism Management play an important role in development . If the government takes the recommended actions for development and promotion it will establish market targets that specify the number and types of tourists that the country will be able to attract. To make sure that national and local tourism development agreements stress a policy of sustainable tourism development.

Incentives that given by the government can encourage many corporations involved in the tourism business to do more their activities to have more recently having a large countries. Thinking of environmental problems it will assist the manager in helping such individual responsibility for and liability to environmental damage, in integrating environmental affairs with operations, and in developing policies and professionals to manage environmental issues. Tour operators have a great deal of influence on the destinations, activities and overall experience of tourists. Therefore its hard that they have understand the idea of ecotourism and the conservation requirements of protected areas that have rules to follow. They need to be fully aware that the ecotourism product they are trying to promote is easily broken and must be carefully preserved. The tourism industry is also an important partner since it is a vital source of information about need trends, promotion and marketing. It would bring attention to the present and future environmental issues facing the health of our planet and the people it supports. And our responsibility to protect the health and well-being of that ecosystem start to beginning of a day on the number of aware that surrounds in the world.

Philippine laws rule the rights and obligations of which support in the hospitality and tourism industry. It provides for their rights, liabilities and even benefits as order by law. It affects the globalization of the tourism industry, also in opportunity to begun addition or widely into the international market or in target grow internationally. Realize the level of technology and technological capabilities within the host country in order to assess the advantages or disadvantages the hotel may face. Human activities are sources of environmental impacts. Since a sustainable environment must be achieved, individuals should make efforts towards developing and protecting the environment in learning of good methods, techniques, and policies.

Human activities are sources of environmental impacts. Since a sustainable environment must be achieved, every person should make efforts towards developing and protecting the environment by learning or doing of good methods, techniques, and policies. Support different developing countries’ efforts to implement different things that could have in development the practices and protect the global environment. To make sure that the goal is in full support of environmental laws.

Overall, consideration of the environment and stick to environmental laws and regulations have become important in the day-to-day behavior of business or in the Hotel and Tourism Management all in the Philippines or throughout the world. Working together by the businesses, workers, environmentalists, and government officials is to find economically into our environment. In helping of our government rules as well our tourism department, we can do better for the everyone’s life. Inspite of rising the demands of needs of everyone, of everyone come to show full support to the strong campaign for the different environmental laws or regulations, with the biggest role of our tourism in advocating and promote or not violating any rules to anyone who is responsible, we should have all the confident to win this one..

With the skills or knowledge of all in the tourism management and see how that connects and from there start volunteering for programs and tell people about it.” But before that first learn how blessed we are and how rich our natural resources are, you would be inspired and motivated to take better care of it. From there, you start with yourself not only our government who pay attention on it.

Sources

http://www.egerton.ac.ke/index.php/bsc-ecoahos.html

http://bio427.blogspot.com/2010/10/environmental-laws-of-philippines.html-.

http://wiki.answers.com/Q/What_are_the_Philippine_tourism_laws#ixzz2718t1XVm

Over the past few years, Grand-Baie witnessed an increase in tourism development and the number of international tourists. Though tourism development plays an important role in enhancing economies, tourism development may conflict with the region’s conservative traditions and culture. The purpose of this research is to identify the attitudes and perceptions of residents of Grand Baie towards tourism development based on socio-cultural aspect by: (1) applying Ap & Crompton’s (1998), (2) measuring social or cultural environments, and the residents’ acceptance of visitors, (3) by identifying resident attitudes based upon demographic factor.

Respondents were selected using a random sampling technique to complete a survey instrument. Descriptive statistics, factor analysis, independent t-tests and One way Annova were used to describe data and to better understand resident attitudes. Survey findings reveal that resident attitudes differed according to respondents’ age, length of residence, and ethnicity, particularly with respect to perceptions of change in local services and natural environment.

Acknowledgements

A project of this magnitude is not an individual endeavor. Consequently, I dedicate this mini dissertation to the many individuals who provided support, encouragement and assistance for its realization. A very special gratitude goes to my team members, Mr. Shaktisham Soobhow and Miss Anousha Keetaruth for their support and input.

I would also like to thank my lecturer, Associate Professor Ramesh Durbarry, Head of School of Sustainable Development and Tourism , for his helpful input and guidance which helped me every step of the way and enabled me to fulfill my assignment requirements

Last but not the least; we are grateful to our parents and friends for their support and understanding and also the team working at the Resource Centre of University of Technology for extending their help.

Table of content
List of tables

Table 3.1: Types of Dataaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ 16

Table 4.1 Respondent Profile

Table: 4.2 “Host Community Perception based on a Socio-Cultural Aspect”

Table 4.3: “One Way Anova”

Table: 4.4 “One Way Anova”

Table 4.5 ‘Host Community Perception Towards a Positive Socio-Cultural impact’

INTRODUCTION
1.0 Tourism in Mauritius

Mauritius has become a well known tourism destination the world over with arrivals rising from 103,000 in 1977 to 915,000 in 2010 for the first trimester. Since the mid 1990s Mauritius more precisely the northern part of the island has experienced a remarkable growth in tourist numbers with international arrivals doubling. It is estimated that this trend is having a significant impact upon host communities in Grand-Baie. Given the fact that tourism development can flourish in an area only with the support of the host community, it is thought that the perception of the host community toward tourism development and impacts serve as crucially important inputs in identifying the strategic and managerial priorities of the tourism sector.

The host community remains one of the most important tools for the promotion and continuous development of the tourism industry in Mauritius. Tourists have direct and constant contacts with the host community and it is the attitude of the host that will determine whether tourism development can be implemented or whether it is successful. Without the host community participation, any tourism development that will be implemented will not be a flourishing one.

1.1 Problem Statement

It is very important to explore host community perception towards tourism because tourists have direct and constant contact with host community. Besides, the measurement of the host community’s perceptions of tourism development plays a vital role in the future success of a destination (Sheldon and Abenoja, 2001).

The benefits received from tourism development may not always be plausible if the negative impacts, such as crime and traffic congestion, outweigh the economic benefits (Chen, 2000). hosts’ perceptions toward tourism development are critical to sustain the growth of community tourism businesses. If the level of hosts’ loyalty to tourism development is high, the potential conflicts between hosts and tourism establishments should be avoided.

Host perception towards tourism development in Grand-Baie Mauritius is a very crucial because the tourism industry there is growing at a rapid pace with the development in that region. Since hosts are there to stay, as such their perception are fundamental to the smooth pace of tourism development.

1.2 Objectives of the Study

The aim of the study is to analyse host community perceptions on the tourism development based on socio-cultural in the region of Grand-Baie in Mauritius. Therefore, the objectives of the study are to

analyse the different components of host community perceptions towards tourism development based on Socio-cultural aspects;

Evaluate the socio-cultural impacts of tourism development on host community

Measure the demographic perception of the Host Community on the tourism development.

2.0 Literature review
2.0 Introduction

Tourism is a product that relies totally upon simultaneous production and consumption. The implication of this for the destination’s host community is that it will come into contact with an alien population during the production process. This contact can be beneficial or detrimental to the host community depending upon the difference in cultures and the nature of the contact.

Tourism can develop and grow when host community has a positive attitude toward it and when they see their role in the process of the tourism development. At the point when a tourism destination is born, the quality if the life of the local hosts goes through radical changes, which are not necessarily negative. Literature suggests that tourism development has created both positive and negative impacts on host communities. The most complex problems that accompany tourism development, reside in the relationship between local host and tourist. Furthermore, there are limits of tourism growth that are closely associated with the place capacity and with the quality of life in the local community.

The most complex problems that accompany tourism development, reside in the relationship between tourists and local host and also the impacts on their society and culutre.

2.1 Tourism Development

Tourism development is an expression that encompasses not only destinations, origins, motivations and impacts, but also the complex linkage that exist between all the people and institutions of that interconnecting, global supply and demand system ( Pearce, 1989).

In general, tourism development within a host community often impacts the community both in negative and positive ways. Resident’s attitudes will be positive if they can use tourism resources such as recreational facilities or if they perceive that tourism development will protect or preserve the environment ( Lankford et al, 2003). Conversely attitudes towards tourism were found to be negative if residents perceived the impacts as negative, or if the resources within a host community diminish as a result of tourist activity ( Lankford et al.,2003; Perdue et al., 1990). The host community perception toward tourism will be affected due to impacts.

2.3 Host community

According to Sherlock (1999), it is difficult to define the term “community” precisely; nevertheless, the word can be used to refer to a group of people who exist in one particular location. Aramberri (2001) suggests that “host societies are in fact communities, made of one piece”. For Williams and Lawson (2001) community is defined as “a group of people who share common goals or opinions”. “Host Community” is particular is defined by Mathieson and Wall (1982) as the “Inhabitants of the destination area”. Similarly, Swarbrooke (1999) defines it as “all those who live within a tourist destination”.. In the light of the previous definition, it can be concluded that a host community consists of all those people in the destination, whether they are homogeneous or heterogeneous and regardless of whether the impacts of tourism are beneficial or otherwise.. However, the host is community is often the last to be notified of tourism development (Thyne and Lawson,2001) and quite often they are not given a chance or encouraged to give their opinioin on tourism issues.

2.4 Relationship Between Host Community and Guest

A good relationship between local hosts and tourist is essential for the long term development of tourism destination. ( Ap and Crompton, 1998). The relationship between host community and tourists is mainly affected by the socio-cultural impacts that are caused due to tourism development (Smith, 1995). Smith (1989) conclude that contacts between tourist and host community if different cultural background take the form of direct face to face encounters between tourists and host of different cultural groups. The interaction between hosts and international guests raises another issue linked to cultural tolerance. As argued by Bochner (1982), the mutual understanding between cultures can create an opportunity for acquaintance leading towards enhanced understanding and tolerance and, consequently, reduce prejudice, conflict and tension between hosts and tourists. This type of contact is experienced by tourists when they travel from home culture to a host culture by hosts when they serve tourists from a foreign culture. That is, both tourist and the host community participate in exploring each other’s culture.

2.4.1 Doxey’s Irridex Model

In 1975, Doxey devised a theoretical model in which it states that an increase in numbers of tourists and a more developed tourism industry at the destination results in irritation in the host community. In this case the perception of host community vary from ‘euphoria’ ( a feeling of happiness or comfort) to ‘apathy’ when locals start losing interest in tourism; to ‘annoyance’ after the number of tourists and the unfavorable impacts have increased ; and finally ‘antagonism’ ( a generation of hostile reactions against tourism) (Cordero 2008).

Although Doxey’s model is a useful approach towards identifying the four stages of tourism evolution at a destination, it has been criticized for its limitation by Wall and Mathieson (2006) because it is a unidirectional model intended to represent the entire nature of the host community.

2.5 Host community perception towards tourism development

Research has been conducted for the convenience of tourists, while local community perceptions and attitudes towards the industry have been given less of a priority (Murphy 1985). Butler (1980) claimed that there is a correlation between the development of tourism and the attitude of the domestic people towards the tourists. Positive attitude is gradually replaced by the negative attitude as the time passes.

Studying host community attitudes and the antecedents of resident reaction can help both residents and planners (Williams and Lawson 2001).Williams and Lawson argued that it was possible to select those developments that can minimize negative impacts and maximize support for the industry. By doing so, on one hand the quality of life of residents can be maintained or enhanced; and, on the other hand, the negative impacts of tourism in the community will be reduced.

2.6 Tourism Impacts

Researchers in the early years of the twenty first century list an impressive range of both positive and negative impacts on the host community as a result of tourism development (Fredline and Faulkner, 2000; Upchurch and Teivane, 2000; Gursoy et al., 2002; Besculides et al., 2002). The study of impacts from tourism on local communities takes in a range of literature that includes both the positive and negative effects of hosting tourists to a community. However, researchers agree that a necessary condition of successful tourism development strategy is the inclusion of residents of the entire community if tourism investment is to yield substantial returns (Allen et al., 1988, 1993; Jurowski & Uysal, 1997; Long et al ., 1990; Snepenger & Johnson, 1991).

2.6.1 Socio-cultural Impacts

Tourism is a socio-cultural event for both the guest and host (Murphy, 1985) and the contact between host and tourists can be beneficial or detrimental to the host community depending upon the difference in cultures and the nature of the contact .Tourism development also affects the social, cultural and environmental aspects within a destination. Socio-cultural impacts are concerned with the “ways in which tourism is contributing to changes in value systems, individual behaviour, family relationships, collective lifestyles, moral conduct, creative expressions, traditional ceremonies and community organization” (Pizam & Milman, 1984, cited in Haralambopoulos & Pizam, 1996, p.503).

Tourism development increases and promotes cultural exchange between tourists and residents. Tourism can also be a force to preserve and revitalize the cultural identity and traditional practices of host communities and act as a source of income to protect heritage sites (Easterling, 2004).

However, the cultural changes caused by tourism “threatens to destroy traditional cultures and societies” (Brunt & Courtney 199, p 495) and to others it represented “an opportunity for peace, understanding and greater knowledge” (Brunt & Courtney 1999, p.495).

2.7 Factors Influencing Host community perception towards tourism development

To understand the antecedents of host communities’ perception towards tourism development, extensive literature has attempted to examine the influences of socio-demographics on attitudes, such gender ( Ritchie 1988; Weaver & Lawton 2001), age (Brougham & Butler 1981; Fredline & Faulkner 2000; Madrigal 1995; weaver & Lawton 2001), length of residency ( Allen et al 1988), Education ( Weaver & Lawton 2001). Those tested variables are classified as the intrinsic dimension which includes residents’ demographic attributes.

2.7.1 Demographic Factors

The use of socioeconomic factors (Harill, 2004) like income, ethnicity and length of residency to explain host community perception has been widely used. These variables are included simply as standard point of survey instrument.

2.7.2 Gender

Regarding gender, it was found that woman were more opposed to tourism development than men due to perceived negative impacts, such as increase in traffic, noise and crime although acknowledging positive benefits, including community facilities and regional economic benefits. In a study in California, (Harrill and Potts, 2003) also found gender to be a significant predictor of tourism’s perceived economic benefits, with more women than men negatively disposed toward tourism development.

2.7.3 Education

It was found that more educated people having more positive views of tourism (Weaver, 2001). Hosts who have a tourism education background were more in favor of tourism because of the economic and social improvements. In the context of Samos, Greece Haralambopoulos and Pizam (1996) indicated that well-educated people were more correlated with positive tourism attitudes.

2.7.4 Age

Age has also been explored as a factor in host community perception toward tourism development and received more attention as the baby boomers retire and seek tourist destination in which to work and have vacation. Older hosts are generally as favourably inclined toward tourism development as young resident (Tomljenovic and Faulkner, 1999). In addition, older hosts are more tolerant of international tourists and less concerned about tourism’s adverse environmental impacts. However, a study of Kusadasi, Turkey revealed that older hosts had more negative perceptions than youngsters.

2.7.5 Length of Residency

Length of residency (Girard and Gartner, 1993) found that for those host who has a second home in the tourism development community appreciate the availability of goods and services from increased tourism, but long term host community who stay permanently in the community do not want to see any increased in tourism development. Thus, long term host had a less favorable perception of tourism than did short term hosts.

2.8 Summary

This chapter provided reviews of literature relevant to the present study. The review provided the basis of the entire research design. Furthermore, the review results would be brought into the Discussion chapter to compare the findings of the present study with the existing literature.

3. Methodology
3.0 Introduction

This chapter provides the methodology of the survey envisaged on host community perception towards tourism development based on socio-cultural aspect. In this vein, it represents the crux of the study. It offers a framework about how the research was carried out and elaborates on the questionnaire design and enumerates several limitations pertaining to the survey.

3.1 Research Design

For this research both primary and secondary data were used.

Table 3.1: Types of Data
Primary Research
Secondary Research

Questionnaire

Books

Academic Journals

The research method used to collect and analyse the primary data was based upon a quantitative approach. This is so because it made it possible for the respondent that is the host community to express their feeling and perception towards tourism development. For this purpose, a questionnaire was designed and distributed to the targeted population.

3.2 Sampling Frame

This study was conducted in the Northern region of Mauritius that is in Grand-Baie which is one of the major tourist destinations. As such, the targeted population for this study comprised of hosts community of Grand-Baie. This is so because tourism development in Grand-Baie has reached the maturity stage (Butler Destination Life Cycle). There is a high concentration of tourism development in this northern village compare to the other region. 60 questionnaires were used for the survey.

3.3 Questionnaire Design

The questionnaire was prepared following a review of existing literature dealing with hosts’ perception toward tourism development based on socio-cultural aspect. For this particular study, the scales from Ap and Crompton (1998) as well as Lankford and Howard (1994) were adopted and modified. An interviewee completed questionnaire was designed and it consists of 38 questions. The questionnaire was categorized into section A, B and C, where A and B were measured using likert Scale and C the respondent profile background. (Refer to Appendix A)

3.4 Hypothesis Testing

The following hypotheses were tested:

H1: Tourism Development has an impact on Socio-Cultural aspect

H2: Residents Perception towards cooperation between local people and tourism development differs across gender and level of education.

H3: the level of hostility towards tourists differs across length of residency and occupation.

3.5 Pilot Survey

To judge the validity of the questionnaire a pilot survey of 10 questionnaires were undertaken with host community to check whether there is a proper and broad flow of questioning. The number of questions were reduced and also the rephrasing of sentence.

3.6 Data Collection

An informal interview was chosen as a method of data collection with the host community. Questionnaires were distributed door to door using a random sampling procedure. Interviews were conducted during the day so as to obtain a more representative sample within households. during the week day. The overall data collection lasted for 1 day, with a total of 53 questionnaires completed, which result in 88.33% response rate.

3.7 Data Analysis

A number of statistical procedures were carried out for this study using the Statistical Package for the Social Sciences. The socio-demographic factors like education, occupation, level of education and gender were used as independent variables and the 32 Likert scale statements as the dependent variables. One-way ANOVA and descriptive analysis were used.

3.8 Limitation of Study

Normally, no survey can experience a perfect evolution. Similarly, the present one had to undergo certain constraints and was subject to various limitations as exhibited below.

Host people were busy working.

They didn’t want to expressed themselves as they felt embarrassed

3.9 Conclusion

This chapter provides a thorough explanation of how data was collected, processed and analysed for the methods of data collection. It gives further details on the purpose of the research and describes how the questionnaire was designed. Lastly, the sampling frame as well as the limitations of the research was discussed.

4. Results and Findings
4.0 Introduction

This chapter discusses the findings of the questionnaire survey. It not only deals with the individual analysis of each question, but also compares one question in relation to others and tries to establish a link between the results found.

4.1 Profile of the Respondents

Demographic information about the respondents is provided in Table 4.1. Males account for a larger share of the respondents, which is 50%, following 38% for female. More respondents were married, with a percentage of 53.33, and 28.33% were single. The majority, 35.33% were employed or working in the tourism sector, 23.33%. Most of the respondents of Grand-Baie work in hotels nearby their house but also many of them worked for themselves.

More than one half of the respondents, 65.33%, lived in Grand-Baie for more than 15 years. Around 52.33% reported that they have studied till School Certificate .

Table 4.1 Respondent Profile
Number
%
Gender

Male

30

50

Female

23

38.33

Marital Status

Married

32

53.33

Single

17

28.33

Divorced

2

3.33

Widowed

2

3.33

Occupation

Student

5

8.33

Employed

21

35.33

Retired

1

2.33

Own Business

12

20.33

Tourism Sector

14

23.33

Education

CPE

8

13.33

SC

31

52.33

HSC

10

17.33

Undergraduate

3

5.33

Graduate

1

2.33

Length of Residency

Less than 5 years

2

3.33

5-10

11

18.33

11-15

1

2.33

More than 15 years

39

65.33

Total questionnaire

53

88.33

4.2 Host community perception based on a Socio-Cultural Aspect

Table 4.2 illustrates the overall results of the descriptive analysis of section A and B of the questionnaire, which in turn show that there is a significant variation (according to the Mean and SD values) between the perceptions of the respondents towards socio-cultural aspect according to the degree of exposure. The domestic people show a very positive attitude towards the increasing number of tourists in the region at the beginning because they have high expectations from the tourist in long term basis. Furthermore, from the table itself, the mean is ranged from 4.81 to 2.57. Demonstrating that the host community highly accepts the presence of tourists in their area although the level of tourist has increased for the recent years.

The results clearly shows that the presence of tourist in Grand-Baie help for the conservation of prestigious monument and also the awareness of the culture. The host community of Grand-Baie stated that their tradition are not being affected at all, as shown in the statement 5. The analysis shows that the tourism development does not make enough effort for the tourist to be aware of the host community culture. Moreover, another reason why the host community perception is low is that the tourism development is much more profit making.

Table: 4.2 “Host Community Perception based on a Socio-Cultural Aspect”
Factors
N
Mean
Std. Deviation

1A

Residents accept the presence of tourists

53

4.81

0.441

2

There is awareness and recognition of the culture and heritage

53

4.28

0.744

3

Historical buildings are restored and protected

53

3.89

1.155

4

There is cooperation between local people and tourism development

53

3.96

1.270

5

Traditions of the local is affected

53

2.91

1.458

6

Local people changes their way of living

53

3.47

1.422

7

There is a variety of entertainment in the community

53

3.49

1.120

8

Tourism increases the level of education in Grand-Baie

53

3.60

1.166

9

Tourism encourages some immoral behavior of some people of the locality

53

2.57

1.352

10

Earnings from tourism lure children in your community to leave school at an early age

53

2.75

1.580

11

Tourism is the reason of some younger`s misbehavior

53

2.98

1.337

12

Tourist make the effort to understand your culture and society

53

4.28

0.632

13

Tourism development give the opportunity to put your culture on display

53

3.89

1.050

14B

Do you welcome the fact that tourist comes in your region

53

4.70

0.696

15

Is tourism only a way of profit making or much more

53

4.36

1.058

16

Due to the number increasing number of tourist arrival in your region can you still support the impacts

53

3.34

1.159

17

Do you feel that there is a feeling of hostility towards tourist due to those impacts by the local community actually

53

3.28

1.215

4.3 There is cooperation between local people and tourism development

Table 4.3 shows the p-value as well as the F value obtained through an ANOVA analysis for both the Gender and Education Level. This analysis shows that there is a difference in the level of perception that varies according to the gender since the p-value is less than 0.05 (= 0.017) which confirms the statement that there is a difference in the level of perception between male and female. In order, to determine where the difference lays a Tukey Test was carried out (Refer to Appendix B).

According to the Post Hoc Test Table (Appendix B), where men disagree with the fact that there is cooperation between local people and tourism development, we found that women strongly agree with the perception that there is cooperation between local people and tourism development which is contrary to what Harill and Potts, (2003) study found. This is so because the p=value is less than 0.05 (= 0.045). The reasons for the level of perception between male and female may vary for different reasons.

First of all, Female may view tourism development in a more positively way as with tourism development many women may find it beneficial for them because they are able to find a job easily or benefit indirectly with small businesses such as craft.

However, the perception do not differs across Education since the p-value is greater than 0.05 (= 0.741). This can conclude that irrespective of the level of education the level of perception is the same. According to the study of Weaver (2001) which states that the educated people mainly those who have a tourism education background are in favor of tourism development.

However, the study made in Grand-Baie demonstrates that the level of education of host community do not has an impact on the level of perception. The reason for this may be because whether a host community is educated or not he or she may find employment due to the tourism development taking place in his locality.

Table 4.3 : “One Way Anova”
Factor Item
Demographic Variable
F
Sig
There is cooperation between local people and tourism development

Gender

3.327

0.017

Education

0.493

0.741

4.4 There is a feeling of hostility towards tourist due to those impacts

Table 4.4 shows the p-value as well as the F value obtained through an ANOVA analysis for both the Length of Residency and Occupation. This shows that there is a difference in the level of perception that varies according to the length of residency of the host in Grand-Baie since the p-value is less than 0.05 (= 0.031). In other words which mean that there is a difference in the level of perception of those living in the region of Grand- Baie. In order to determine where the difference lies a Tukey Test was carried out (Refer to Appendix B).

Referring to the Post Hoc Test Table (Appendix B), where those living in Grand-Baie whether living over there for a long time or short time, it has been found that they do not express a feeling of hostility vis-a-vis the tourist due to the impacts that tourism industry in the region brings in. This is so because the p=value is less than 0.05 (= 0.016).

However, the perception do not differs across Occupation since the p-value is greater than 0.05 (= 0.952). This can conclude that irrespective of the work being done by the host community, the level of perception is the same.

In other words, this demonstrates that the level of Occupation do not has an impact upon the perception of host community. Reason why it is so is because whether they are employed or unemployed or working in the tourism sector, the host find tourism as beneficial for them directly or indirectly.

Table: 4.4 “One Way Anova”
Factor Item
Demographic Variable
F
Sig
There is a feeling of hostility towards tourist due to those impacts

Length of Residency

2.909

0.031

Occupation

0.171

0.952

4.5 Host Community Perception towards a Positive Socio-Cultural Impact

Table 4.5 illustrates the different perception of the host community towards the different aspect. The host community of Grand-Baie has a relatively high positive perception towards the presence of tourist in the region as it benefit from different point of view. This is so because the tourist make an effort to learn the culture of the host community and a

The Indian hospitality sector is certainly the most apt replication of the belief Atithi devo bhava- touch of tenderness, a helping hand and a welcoming visage. According to the Tourism Satellite Accounting (TSA) research, released by World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in March 2010.

Hospitality is the world’s largest service industry, employing millions of people working in hotels, restaurants, cruise lines, resorts, private clubs, casinos, and bed-and-breakfasts throughout the world.

As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world’s attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country.

India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

The hospitality industry is a 3.5 trillion dollar service sector within the global economy. It is an umbrella term for a broad variety of service industries including, but not limited to, hotels, food service, casinos, and tourism. The hospitality industry is very diverse and global. The industry is cyclical; dictated by the fluctuations that occur with an economy every year.

Trends in Hospitality Sectors

Trends that will shape the future of hospitality sector are:

2.1. Low cost carriers:

Travelers in general are more price sensitive to airfare than they are to hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low costs, more options and connectivity.

2.2. Budget hotels:

More than 50 per cent of occupancy of a majority of hotels comes from the business travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have resulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Hometel, Kamfotel, Courtyard by Marriott, Country Inns & Suites, Ibis and Fairfield Inn.

2.3. Service apartments:

The concept of service apartments, though a recent phenomenon in India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes in the US have all created a viable market for those who want more than just a room in a hotel. Service apartments are the latest trend in accommodation, offering the comfort and convenience of a home without the hassles of having to maintain or look after it. Ideally suited for medium-to-long staying guests, service apartments are a natural choice for corporate employees or expatriates relocating to a particular city, non-resident Indians visiting the country for long spells and foreigners visiting the city for long durations.

2.4. Technology:

Travel and technology have become inseparable. Technology is making its own advances with high-tech video conferencing facilities, web cameras and virtual reality mode of conferencing. On-line bookings, e-ticketing, Wi-Fi Internet connectivity, easy access to information, etc. are just a few areas where technology has completely changed the the way we travel.

2.5. Loyalty travel:

Today, airline-credit card company tie-ups have brought a whole range of benefits to the travelers. These include insurance cover, upgrades, free tickets, access to executive lounges, and a host of other goodies.

Hospitality Industry in India

Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 and 2016.

Contribution to the economy

Combining unparalleled growth prospects and unlimited business potential, the industry is certainly on the foyer towards being a key player in the nation’s changing face. Furthermore, banking on the government’s initiative of upgrading and expanding the country’s infrastructure like airports, national highways etc, the tourism and hospitality industry is bound to get a bounce in its growth.

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.17 billion from April 2000 to September 2010, according to the Department of Industrial Policy and Promotion (DIPP).

India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits, Regional Managing Director, InterContinental Hotels Group (IHG) Asia Australasia. He added that the Indian hospitality industry is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector.

Foreign Tourist Arrivals

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) in India and Foreign Exchange Earnings (FEE) from tourism on the basis of data received from major airports. Following are the important highlights, as regards these two important indicators of tourism sector for October 2010.

FTAs in India during October 2010 were 487,000 as compared to FTAs of 446,000 during the month of October 2009 and 450,000 in October 2008.

FTAs during the period January-October 2010 were 4.32 million with a growth rate of 9.9 per cent.

FEE from tourism during the month of October 2010 were US$ 1.18 billion as compared to US$ 1.09 billion in October 2009.

Changes in Demographics

Population is changing and people are living longer

The need to provide family-oriented services will soon peak

Number of older club members will increase

Number of younger workers will decline

A shortage of 10 Million workers is expected.

Government Initiatives/policy

According to the Consolidated FDI Policy, released by DIPP, Ministry of Commerce and Industry, Government of India, the government has allowed 100 per cent foreign investment under the automatic route in the hotel and tourism related industry. The terms hotel includes restaurants, beach resorts and other tourism complexes providing accommodation and /or catering and food facilities to tourists. The term tourism related industry includes:

Travel agencies, tour operating agencies and tourist transport operating agencies

Units providing facilities for cultural, adventure and wildlife experience to tourists

Surface, air and water transport facilities for tourists

Convention/seminar units and organisations

The Government of India has announced a scheme of granting Tourist Visa on Arrival (T-VoA) for the citizens of Finland, Japan, Luxembourg, New Zealand and Singapore. The scheme is valid for citizens of the above mentioned countries planning to visit India on single entry strictly for the purpose of tourism and for a short period of upto a maximum of 30 days. During the period January – October 2010, a total number of 5016 VoAs were issued under this Scheme.

The tourism master plan, the first for Karnataka, envisages initiatives to attract private investment ranging from US$ 2.2 billion to US$ 4.4 billion in the next three to five years. The plan is prepared based on the Vision 2020 document prepared and adopted by the Karnataka State Planning Board. The state government aims to generate 200,000 jobs in the tourism sector in the next five years. The master plan is aimed at making Karnataka the number one destination for tourism in the country by 2020, according to Mr G Janardhan Reddy, Minister for Tourism and Infrastructure Development

Strengths

Natural and cultural diversity : India has a rich cultural heritage. The “unity in diversity” tag attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala, snow capped Himalayas and the quiescent lakes are incredibl

Demand-supply gap : Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to the rapid expansion of the sector

Government support: The government has realized the importance of tourism and has proposed a budget of Rs. 540 crore for the development of the industry. The priority is being given to the development of the infrastructure and of new tourist destinations and circuits. The Department of Tourism (DOT) has already started the “Incredible India” campaign for the promotion of tourism in India.

Increase in the market share: India’s share in international tourism and hospitality market is expected to increase over the long-term. New budget and star hotels are being established. Moreover, foreign hospitality players are heading towards Indian markets.

Weaknesses

1. Poor support infrastructure: Though the government is taking necessary steps, many more things need to be done to improve the infrastructure. In 2003, the total expenditure made in this regard was US $150 billion in China compared to US$ 21 billion in India.

2. Slow implementation: The lack of adequate recognition for the tourism industry has been hampering its growth prospects. Whatever steps are being taken by the government are implemented at a slower pace.

3. Susceptible to political events: The internal security scenario and social unrest also hamper the foreign tourist arrival rates.

Opportunities

Rising income: Owing to the rise in income levels, Indians have more spare money to spend, which is expected to enhance leisure tourism.

Open sky benefits: With the open sky policy, the travel and tourism industry has seen an increase in business. Increased airline activity has stimulated demand and has helped improve the infrastructure. It has benefited both international and domestic travels.

Threats

Fluctuations in international tourist arrivals: The total dependency on foreign tourists can be risky, as there are wide fluctuations in international tourism. Domestic tourism needs to be given equal importance and measures should be taken to promote it.

Increasing competition: Several international majors like the Four Seasons, Shangri-La and Aman Resorts are entering the Indian markets. Two other groups – the Carlson Group and the Marriott chain – are also looking forward to join this race. This will increase the competition for the existing Indian hotel majors

3.9. Major players in Hospitality Industry in India.

1. The Indian Hotels Company

2. ITC/ Sheraton Corporation

3. The Leela Group

4. The Bharat Hotels Group

5. The EIH Ltd (The Oberoi Group)

6. India Tourism Development Corporation (ITDC) / The Ashok Group

7. The Hotel Corporation of India (HCI)

8. Jaypee Hotels Ltd.

India’s Role in Hospitality

The current count of hotel rooms is 130,000, and the country is expected to require an additional 50,000 rooms over the next two to three years, according to World Travel and Tourism Committee (WTCC) estimates

US-based hotel chain, Marriott International, plans to expand its network in India to 100 hotels over the next five-years, stated Arnie Sorenson, Chief Operating Officer, Marriott International. At present, the group operates 11 properties across the country.

The Road Ahead

The contribution of travel and tourism to Gross Domestic Product (GDP) is expected to increase from 8.6 per cent (US$ 117.9 billion) in 2010 to 9.0 per cent (US$ 330.1 billion) by 2020.

Export earnings from international visitors and tourism goods are expected to increase from US$ 11.1 billion in 2010 to US$ 33.6 billion in 2020.

Travel and tourism investment is estimated at US$ 34.7 billion or 7.2 per cent of total investment in 2010. By 2020, this should reach US$ 109.3 billion or 7.7 per cent of total investment.

Roots Corporation, a subsidiary of Indian Hotels Company (IHC), plans to open 60 to 70 budget hotels, known as Ginger Hotel, in 23 locations across the country.

ITC, the Kolkata-based cigarette major, also projected its plan to open 25 new hotels under the Fortune brand over the course of next 12-18 months (or by 2011).

International Hospitality Business

Hospitality is very important component of Service industry in any country’s national economy. When a domestic hospitality company decides to expands its operation into a foreign country, its overseas development recognizes as international business and its business revenue generated from overseas operations are described as service export.

Advantages of International hospitality services:
Management Companies
Investment Companies

Fast Chaining: Hotel management companies can develop much faster using this method with very limited risk.

Reduced risk in running hotel business

Financing the property: management companies need a little or no initial investment

Generally minimum profit is guaranteed and the capital investment will be paid back

The reduced risk: the risk for management companies running the deriving from excess building cost, market recessions or changing markets are all significantly reduced.

With the recognition of the prestigious hotel brand name the value of the property may increase

High return on investment (ROI): due to the low amount of investment required from hotel management companies, very high financial and economic earnings can be achieved

Disadvantages of International hospitality services:
Management Companies
Investment Companies

Obtain only part of the profit

Last control of daily operations of property

Loss of properties potential appreciation in the past 5 years, in many parts of America and Britain, property prices are more than doubled.

The management company may not have necessary year of experience, knowledge or resources in managing overseas business

The owners may interfere despite the contract in some of the management issues limiting the management companies’ operational potentials

Management companies may lose the contract in certain stage

Case Study – TAJ HOTEL

The Indian Hotels Company (IHC) is the parent company of Taj Hotels Resorts and Palaces. It was founded by Jamsetji N. Tata on December16, 1903. Currently the Taj Hotels Resorts and Palaces comprises 57 hotels at 40 locations across India .

Physical Evidence

Lobby- It being the first & the last part of the hotel that the guestsees,thus it should be well designed, also to ensure that the customer returns again the room should be comfortable and should have made his stay hassle free process

Major service encounter that extremely delighted or disappointed are:

1. Check – in.

2. Bell person carrying luggage to the room.

3. Food.

4. Wake up call

5. Check out.

PROMOTION STRATEGY

Promotional schemes are carried on regularly the hotel has many loyalty programe, clubes, membership, previlage etc some of them are

The Taj Inner Circle.

The Taj Junior League.

The Taj Club.

Taj also offer Taj surprises including weekend savers,value vouchers,book early get more.

ADVERTISEMENT

Business news paper(E.T, Financial Express, Bombay Times)

T.V channels like STAR NEWS,CNN and CNBC.

Magazines like THE OUT LOOK TRAVELAR,GO NOW and TRAVEL.

Global Awards:
Jan-2008

Dun & Bradstreet – American Express Corporate Awards 2007 -India’s Top 500 Companies 2007 – in the “Hotels” category – The Indian Hotels Company Ltd.

Sep-2008

Taj Hotels Resorts and Palaces is proud to receive the award for

‘The Best Business Hotel Chain in India’ by the readers in UK at

the 2008 Business Traveller Awards.

Some Mile stone of Taj GROUP

1903 – The Company opens its first hotel, the “Taj Mahal Palace” in Mumbai, India. The Company opens its first five star deluxe beach resort, the “Fort Aguada Beach Resort” in Goa.

1974 – The Company begins business in metropolitan hotels by opening the five star deluxe hotel, the “Taj Coramandel” in Chennai

1980 – The Company opens its first hotel outside India, the “Taj Sheba Hotel” in Sana’a, Yemen.

2006- The Company acquires the “W” hotel in Sydney, Australia which is later renamed as the “Blue Sydney”.

The Company commences operation of its first wildlife lodge at Mahua Kothi, Bandhavgarh.

2007 – The Company acquires the “Ritz-Carlton” in Boston, USA which is later renamed as the “Taj Boston.” The Company commences operation of its second wildlife lodge at Baghvan, Pench.

COMPETITERs

The hotel has many competitors like

The Oberai towers

The Marine Plaza

The Orchid.

Le Meridian

Mergers and acquisitions

Starwood Group (W Hotel)

Sydney

Dec-05

The Pierre US

July 2005

Regent Hotel (renamed Taj Lands End)

India

Sep-02

This study has analysed the trends of the hospitality industry with special importance on Tamilnadu where the researcher has aimed at helping and growing the family business. This is done to get a better understanding of the Chennai’s market place, along with many other important cities in the state making it possible to go on board on selected strategies to effectively reach the local consumers.

As Mohanty (2008) says, Hospitality is all about offering and comforting someone by all means to their needs. Good support from customers can be achieved by receiving and entertaining each and every single guest. In commercial context point of view, the word Hospitality refers to hotels, resorts, restaurants, clubs, catering etc.

In today’s world Economic Growth of a country depends on Hospitality industry along with Industrial and Agriculture. Tourism and Hotel sector is a widely expanding and booming segment in the market, and this industry offers huge job prospects to Indians.

Due to globalisation there has been immense growth in Hospitality segment in India, especially in the metro and cosmopolitan cities. This has resulted in demand for well qualified and experienced candidates from this field in India and Overseas. India has become a ideal place of tourism and is the only country in the world with different cultures, languages and diverse topography along with political stability.

India has become the place for Information technology companies and as Purushottaman (2005) says India has propelled to the top of the world in both Information Technology (IT) and Information Technologies enabled Services sector (ITES). Many MNC’s from all around the world have opened their operations throughout India especially in South India. Initially Bangalore served as the Indian operations head office for many companies but then later on Chennai, capital of Tamilnadu state is becoming a business hub for major MNC’s. This is due to involvement of many foreigners coming to India for business development. As a part of business development, business travels boomed to high and due to this the Hospitality sector developed along with more profitability. Nearly 50% of occupancy in all the hotels in major cities of Tamilnadu like Chennai, Madurai, Coimbatore, Trichy, Tuticorin, Tirunelveli have come from business travellers. In this particular research, the author has evaluated the development of the hotel industry with a focus on above mentioned cities in Tamil nadu, India.

The performance of Hotel Industry is back on its development and growth path as it had been in decline for the past two years (i.e.) 2008 & 2009 due to global economic recession, which affected the hospitality business in India. According to HVS 2009 report, the foreign arrivals have declined by 20% in 2008 – 2009, resulting in decline of occupancy and performance of hotel industry throughout India. All the major cities in India like Mumbai, Chennai, Delhi, Bangalore, and Kolkata had an average of 10% marginal decline in occupancy rate. According to FHRAI and HVS 2009 report, though the industry has faced decline in performance, the demand for the industry will immensely grow from 2010 and has reported that an average 5% growth will be recorded from 2010. In Tamilnadu though the industry faced decline in its capital, Coimbatore and Ootacamand has raised its status to become one of the 12 major cities in India after the metro cities. According to HVS 2009 report, the occupancy rate of Hotels at Coimbatore, Madurai in Tamilnadu has increased by 5% respectively, though the industry on a whole has faced decline. So this clearly indicates the rise of demand for Hotel industry in Tamilnadu. In Industrial aspect all the cities in Tamilnadu has developed along different businesses. In last year several new projects have been announced in Chennai, Coimbatore, Madurai, Ootacamund which is due to higher growth market and more are required to ease the current situation. General occupancy rate and cost of rooms is high in major cities as the demand for rooms have increased but then the number of available rooms is less than the demand (HVS International survey, 2004

).

India economy has boomed in the last 5 to 6 years which is due to flourishment in IT sector, Finance, Banking, Telecom , Biotechnolgy, Real estate, Retailing etc. As Joshi (2005) denotes many major hubs in the country lacks quality hotels and rooms. Though the industry has developed a lot in the previous decade still there is demand for number of rooms required is under lack. He also denoted that India will become one of the world’s fastest growing tourism market and as suggested by him, the number of foreign tourists have increased in the year 2006 and 2007.

SWOT ANALYSIS of Hotel Industry in Tamilnadu.
STRENGTHS

Natural and cultural diversity: India on a whole is very rich in cultural heritage and values. While considering the state of Tamilnadu, its heritage and history dates back to B.C., it has many historic places and monuments. The state pocess three main tourist spots in the country namely Oatacamund, Kodaikanal, Courtrallam and it’s the place where Rameswaram lies, one of two most spiritually important places in India for Hindu’s community. The state is along the southern coastal line of the country and has got many beautiful and sunny beaches along is shore. The state has become the region for business as it has got all the transportation means required and the state capital has one of the busiest ports in India. The state has got 8 national sanctuaries, and it has got many hills station including Ootacamund & Kodaikanal.

Demand Supply gap: There has always been a mismatch between demand and supply of rooms in Indian Hotel Industry. This has been the reason for higher room tariffs and the level of occupancy. The demand is raised a lot as India is hosting the 2010 Commonwealth games, and most importantly the demand for Chennai will increase due to 2011 Cricket World Cup in India. Many star categorized hotels have come in important cities of Tamilnadu in the last decade.

Economical Growth: India’s economy is growing to new heights and been predicted to be second after China by 2050. India has now become a part of G20 nations which in turn denotes the growth of the Indian economy. Chennai city being one of the major business hubs of India is Bourne to immense growth in near future due to increase IT firms, growing Industry in numbers, government tourism development, and other business activities. Coimbatore, the other city in Tamilnadu which was initially a hub for textile industry has now turning out to be IT hub with many MNC’s started to have their operations there. Due to industrial and automobile growth, the state of Tamilnadu has now become more occupied with the state having 6 different automobile company plants. Overall the International and domestic economic growth has brought in huge opportunity for Hotel Industry in Tamilnadu. Many huge player in the global market with global chain have started to walk in to Chennai market and along the state (tamilnadu).

Weakness

Slow Implementation- Growth in the tourism sector is considerably slow when compared to other departments. Though the market needs have increased, the adequate infrastructure facility for Hotel Industry is still lacking. Lack of proper manpower has always been an issue in the industry.

Regional Imbalance: Regional Imbalance of hotels is prevailing a lot throughout India and that prevails in Tamilnadu also. Still some of the tourist spots in Tamilnadu, there isn’t adequate number of rooms for to increase the demand and develop that region to be major tourist spot. Due to this, those tourist spot regions are still under developing schemes and they lack the actual demand which they are capable of producing.

Capital Intensive: Initial cost involved in Hotel construction project (i.e.) cost of land is very high and contributes 50% of the total project cost, whereas in other countries it is around 15%. This operates as a major restriction to the Indian hotel Industry, with Tamilnadu being no exemption to this context.

Long Gestation Period: Due to lack of proper government development scheme being actuated many rural tourist spots with cultural importance and heritage places lack hotels. This is due to long gestation period for the hotel to get back its breakeven point and also the future growth of the firm is under immense doubt. As mentioned earlier land cost being high in India, time period for Hotel development needs to be very fast in order flourish in the market. As of now this long growth period is making a full stop to Hotel Industry development in those areas.

Oppurtunities

Rising Income: The tendency of spending has increased among Indians due to rise in income levels. People of different age groups are bound to spend on different purchases and are more bound to spend on leisure tourism on a whole.

Economy Rise: As stated in The Financial express (2008), Overall Indian Hotel Industry is going through a healthy growth phase due to rising economy which has made many foreign companies and investors to enter India, which in turn has raised the occupancy in Hotels. Thus due to economy rise government have implied many schemes to develop tourism. It has also stated that in Conde Nast Travaller ranking, India is been ranked 4th among 167 countries in most preferred travel destinations. This denoted that India has making its mark on global tourism sector.

Threats

Global Recession: In the last couple of years though the market for Hotel Industry has increased, the occupancy level has decreased due to global recession. Due to this situation, the percentage of business travellers dropped heavily as the company’s restricted the travel expense for its employees. The dependency level on foreign tourists is always risky, as the economic depression has affected in all the developed companies and developing countries across the world. Hence there has been a huge fluctuation in International tourism.

Rising Competition: Major International Hotel chains are entering Indian market as it is becoming the destination for economical growth. The existing market players are also bringing in lot of new facilities and offers to attract customers. Hence striving a place in customer mind will prove to be a hectic job. Thus there will be a rise in competition among the exciting Hotel market.

.
Aim:

The main of this research is to explore the fundamental factors influencing the performance of the Hotel Industry in India, with special emphasis on Tamilnadu.

Personal aims include:

Preparation for myself in this hospitality line which will guide me to develop my family business to new heights in the market.

To encourage Hoteliers make best use of the information resources gathered in this research.

The need for the study emerges as more and more Hotel chains have started involving themselves in different type of complex business models and also they emphasize the need for cost-efficiency.

Objectives:

To assess the past and present performance of Hotels in Tamilnadu.

To categorize the core factors of the identified trends.

To understand the future growth opportunities for the hospitality sector in Tamilnadu.

To provide proposals for the further development on this sector with regards to the state of Tamilnadu.

Literature Review

The term Hotel in British law is defined as the place where a bonafide traveller can receive food and shelter provided he is in a position to for it and is fit condition to receive (Yashroy.U, 2008).

The origin of hotels came to India from British people. Until late 1920’s all the hotels in India were maintained by British and Swiss people. The fact of Chennai being a metropolitan city dates back to 1639 when Chennai was used as main port for trading by East India Company which was maintained by British (Chennai Hotels, 2007).

In current industrial world, one of the most successful industries is Hotel Industry. Demand has always been more than supply in all the cities. As FDI restrictions been eased off by government many MNC’s have opened their operation in India especially in Tamilnadu. Indian economy rise in global market and rise of business activities in India has insisted for a need of quality hotel rooms for corporate and industrial people. This trend of hospitality development is significant all over India. Leisure travelling has increased in India, which also contributes to the factor of growth in Hotel Industry. Almost all the major hotel players in the world have their operations in India, which itself indicates the growth of Hotel Industry in India.

While considering the state of Tamilnadu Chennai, Coimbatore, Madurai, Trichy, Tuticorin are the major cities and Ootacamund, Kodaikanal, Courtrallam, Yercaud, Kanyakumari are the main tourist spots in the state. Demand supply mismatch has increased along all the above mentioned places in terms of Hotel rooms.

In the last few years the number of inbound tourists (foreign tourist) has increased and has been around 4.9 million in 2007, while outbound tourists (Indian going on foreign tour) have been around 8.3 million in 2006 (ITOPC, 2008). In the outbound tourists segment lot of travel has been business travel while others have been leisure travel segment. Since both the inbound and outbound tourism has increased, the need for quality hotels in India has been rising. India being a country of wide culture and composite of world class heritage is the main reason for its tourist attraction in the global arena.

Considering the tourism in Tamilnadu, the domestic leisure travel is based on seasonality for the tourist spots and for cities is based on full swing business travel. Beside the rise in income level of the people has been a main reason for rise of leisure tourism in Tamilnadu. But still the majority of Star class hotels are used for business travels and Budget hotels are used for leisure travel.

Inbound Tourism Statistics
Foreign Tourists In India (Number)

2001
2002
2003
2004
2005
2006
2007
2008
January

283750

228150

274215

337345

385977

459489

532088

584765

February

262306

227529

262692

331697

369844

439090

498806

560658

March

248965

225558

218473

293185

352094

391009

444186

509926

April

185338

155378

160941

223884

248416

309208

333945

369677

May

151098

132998

141508

185502

225394

255008

267758

290785

June

176716

143100

176324

223122

246970

278370

310104

344526

July

224432

186432

225359

272456

307870

337332

377474

–
August

196517

161477

204940

253301

273856

304387

360089

–
September

162326

151721

191339

226773

257184

297891

325893

–
October

181605

212191

260569

307447

347757

391399

440715

–
November

209685

243566

290583

385238

423837

442413

510987

–
December
–
–

319271

417527

479411

541571

575148

–
Total

2282738

2073025

2726214

3457477

3918610

4447167

4977193

2660337

Source: Ministry of tourism, Govt.of India (ITOPC, 2008).

Domestic Travel Statistics
Tourists Statistics – Tamil Nadu
Year
Domestic Tourists
2004

42279838

2005

43213228

2006

58340008

Source : Ministry of tourism, Govt. of India (ITOPC, 2008).

Outbound Tourism Statistics

Statistics of Indian National Going Abroad
Year
No of Outbound Indians
Percentage Change over the previos year
2000

4415513

7.3

2001

4564477

3.4

2002

4940244

8.2

2003

5350896

8.3

2004

6212809

16.1

2005

7184501

15.6

2006

8339614

16.1

Source: Ministry of tourism, Govt. of India (ITOPC, 2008).

The categories of hotels in India are of five segments. Those segments are Premium & Luxury segments, Mid Market Segment, Heritage Hotels, Resorts, Budget Hotels, and Unclassified Hotels.

Premium and Luxury Segment

This segment is based on major players in the local and International market. The whole slot in this segment comprises of 5 -star and 5 -star deluxe hotels which mainly serves business travellers and upmarket foreign travellers. These hotels fall into luxury segment and they offer a high quality and higher range of services. They tariffs and other service cost in considered to be expensive and is situated only in metro cities and major tourist spots. This segment alone contributed 30% of total number of rooms back in 2004. When comparing with Tamilnadu’s context, it contributes 15 % of total number of rooms which is nearly half to the national segment ratio (Bhatia, 2004).

Mid-Market Segment

This segment is based on local players in the market and small chain of hotels within the domestic market. The 3star and 4star hotels falls under this segment, and they mainly cater to the average domestic and foreign leisure traveller, along with domestic business travellers as they nearly offer all the services as of premium hotels under low cost than the premium as the tax component for this sector is less than that of luxury and premium segments. This segment contributes 30% of the total number of rooms in Chennai, Coimbatore, and Madurai – major cities in Tamilnadu (HVS International, 2009).

Budget Segment

This segment has emerged due to liberalisation in economy and is been mainly catered to middle class people with higher disposable income. This class comprises of 1 star and 2 star hotel. This type of hotels holds the major percentage of existence in the state of Tamilnadu. This segment caters for domestic travellers who prefer reasonably priced accommodation with limited luxury, and offers special seasonal discounts for domestic tourist packages. Low cost and good service is the main forefront of this hotel segment.

Heritage Segment

This segment is classified in the recent years to denote the hotels in palaces, castles, forts, and other buildings which were constructed before 1950. These traditional structures symbolise the ambience and luxury lifestyle of the past golden era (Ghosh, 2005). They have come to limelight with their lesser initial capital and for mirroring the traditional lifestyle of the past. These values have proved to be a major point of attraction and business for these hotels. While considering the context of Tamilnadu there are more than 10 hotels in existence (HHIMT, 2006).

Unclassified or Other Segments

This segment of hotels and motels are spread out throughout the country. If taken into account these contribute 50% of room’s occupancy in India. Their main point of sales income is low pricing policy. However some of them came into prominence on account due to increase in tourist congestion in major cities and tourist spots. These hotels officially now contribute 19% of the Industry.

Performance measures in hotel management

The performance of hotel property and chains can be measured in several ways. The simple method would be evaluating room rates and occupancy ratios. Another important measure with regards to occupancy rates is the Average Daily Room Rate (ARR). This is manipulated by dividing the revenue with the total number of rooms occupied. This occupancy ratio is also relatively important as that of ARR because it is an important indicator of profitability. The rate of occupancy is manipulated with number of rooms occupied by number of rooms available (Sola et.al, 1997, p.85).

Market concept of Hotels

As mentioned by many authors, Hotel is an commercial hospitality institution which offers services and loads of facilities to its customers on various cost factors aspects (Ghosh, 2005).

Facilities

Service

Location

Price

Image

(Source: Ghosh, 2005, p.131)

All the five factors denoted in the factor are the terms related to hotel marketing concept. The term Location refers the geographic location of the hotel whether is the hotel is present in a city, rural area, or a tourist spot etc. It denotes to attractive features of the form, accessibility to the hotel, convenience factor, along with the surroundings. The term facilities refers to classy rooms, restaurants, leisure features, bars, banquet halls and recreation facilities (Weissinger, 2000). . The term Service refers to the quality of the facilities offered and the extent to which it reaches to the consumers, availability of that service offered (Hoque, 2002). Price factor implies the value given to its facilities and services offered to customers. The Image is a vital marketing factor as it portrays the hotel in the market and to the customers. This image is obtained from the above mentioned factors. For to maintain this factor all other factor have to be streamlined (Ghosh, 2005).

Performance of Hotels in Tamilnadu

The main focus the occupancy patterns of hotels two major metropolitan cities and two major tourist spots of Tamilnadu.

The two major cities to be discussed are Chennai and Coimbatore and the two major tourist spots are Ootacamund and Kodaikanal.

The percentage of occupancy rate in Chennai has risen by 12% in the current 2009 -2010 financial year after a decline in 2008 – 09 by 13% due to global recession. While in the case of Coimbatore, though the industry was also affected by recession in 2009, it dropped only by 5 % considering its growth ratio for the past decade with an average rise of 6% per year. The industry has also risen in current 2009 – 10 financial year by 10%. Both the cities are expected to have 16 new hotels, commercial serviced apartments for MNC’s over the next 5 years. Both the cities have become an IT hub in the southern part o India. Chennai is amongst the seven major metropolitan cities, while Coimbatore and Ootacamund has become one amongst the twelve other major cities in the Hospitality and Industrial growth list (HVS&FHRAI survey, 2009).

The performance of Hotel Industry in Chennai city saw a decline in first half of 2009 as there was cost cutting activities taken by IT & ITeS sectors and other business sectors along with decline in travel and entertainment. Though there was decline the city had the opening of two new star hotel property Taj Mount road & Lemon Tree. The industry by the end of 2009 saw a rise in occupancies as the businesses boomed again and many new projects associated with travel and occupancy was announced. As mentioned earlier Chennai has always had a steady rise in Hotel Industry (HVS&FHRAI survey, 2009).

The performance of Hotel Industry in Coimbatore has been growing with steady Growth phase and Demand. Coimbatore is popularly known as Manchester of the south. The city itself is based on diversified economy consisting auto – ancillary sector, textile sector, textile manufacturing and majorly in the past 6 years service sector has boomed in the city. The lower cost business operations have raised the city to prominence as a business destination in Tamilnadu and now across India. The occupancy rate has risen from 64 % in 2005 to 79% in 2009 though had a drop to 72% in the start of 2009 due to global recession. Coimbatore also has close proximity to Nligiris which implies that the demand for the Leisure segment will rise in the next few years. The current Star rated occupancy of 350 rooms is expected to rise to nearly 875 rooms which add pressure to the need of upgrade with the performance of hotels in a short term (Times, 2009).

The existence of Ootacamund or in short term called Ooty, one of the major tourist destinations in India and has clearly marked as one amongst the other twelve major cities in India with its tourism Industrial growth. It is one of the primary hills station in South India. It is easily accessible via road and railways from Coimbatore, Chennai & Bangalore. Ooty has retained its name as a Hills station tourist destination and hence many innovative and eco friendly hotels have come up nearby to the wildlife destinations. It is surrounded by natural sceneries, lakes, wildlife sanctuaries and many others. Domestic travel to this destination is being increasing at a higher pace (Kumar, 2010). The hotel occupancy has increased from 44% in 2005 to 59% in 2009 (HVS&FHRAI survey, 2009).

Kodaikanal is another major hill station in Tamilnadu. Tough Kodaikanal is categorised under developing urban areas, it still remains untouched by urban development and dense population as that of Ooty. It has got access from all the major cities in Tamilnadu and from Kerala as well. Though the number of Hotels in Kodaikanal is less than that of Ooty, they offer iunparelled experience in terms of comfort and services. It is surrounded by hills, huge lake, and number of parks, museums, and heritage places. There are two five star hotels, three four star hotels, more than 10 three star hotels in Kodaikanal. It is an intense developing tourist spot in India (Agarwal, 2007)

Principle factors for growth of Hotels in India (Tamilnadu)

The factors which influence the occupancy rate of Hotels , and their average room cost across the country are Domestic travel, International Arrivals, Health and Medical tourism, Business travel, MICE – Meetings. Incentives. Conferences. Exhibitons.

The Domestic travel is the vast growing market in India. Domestic Guests market is considered to be the most important segment for Indian hotel Industry, which accounted to 71.7 % of all guests in 2004- 05 (HVS, 2006).

The effective guidance role for domestic travel is played by Budget airline, or low cost carriers. These have played a vital role in short business trips, short visits etc. Due to this a person from Chennai can go to Delhi in the morning, do his work over there and come back in the same day evening. This has made people’s work more convenient and easier than before, initially the cost factor played a vital role in choosing airlines. They were only used by higher business people as the ticket fare was costlier but then after the entry budget airlines in the market the frequency of air travel and the number of domestic travellers has been increasing from the initial entry period. The number of destinations has increased due to rising air trafiic. So connectivity to various destinations from one single destination is now very much possible. Now all the major private carriers, government carriers, and other small players in the market deal with budget airlines. They are Jetlite, Jetkonnect, Spice Jet, Simplifly deccan, Air India Domestic formerly Indian Airlines, Go air, Paramount, Indigo and other new players which are in the queue for launch (Goyal, 2009).

Tourists Statistics – Tamil Nadu
Year
Domestic Tourists
2004

42279838

2005

43213228

2006

58340008

Source: Ministry of tourism, Govt. of India (ITOPC, 2008)

International arrivals have been increasing steadily as the Business travels due to MNC’s, leisure trips, and other trips have increased. Many Private and Government Indian carriers are now been operated to various destinations in the world which plays a vital role for the rise in International arrivals. Governments tourism scheme Incredible India is the most successful plan implemented by tourism ministry. This campaign has brought in many foreigners. This particular scheme has offered many advantages for tour packages. Hence the tour operators are doing aggressive marketing and attractive package offers to attract foreign tourists to India. The table below suggest that year 2008 has attracted around 5.4 million tourists from around the world, which is 5.6% more than previous year. The estimated foreign exchange earnings generated in the year 2008 was 50730 crores which are 14.4 % more than that of the previous year. The foreign exchange earning in terms of US dollars was 11747 US million$ which is 9.3% rise than the previous year. Hence the rate of tourist’s arrival and the income has increased which in turn has resulted in growth of Indian hotel industry. In accordance to an official review the impressive inflow is one of the main reason for the rise in airline passengers, which in turn as the result of intensive advertising campaign done by the Ministry of tourism (Travel & Tourism, 2005).

Year

Foreign

Tourists

Arrivals

(in nos.)

Percentage

Change Over Previous Year

Estimated Foreign Exchange Earnings (Rs. In Crore)

Percentage of Change Over Previous Year

Estimated Foreign

Exchange

(in Million US$)

Percentage Over Previous Year

1999

2481928

—

12951

—-

3009

—–

2000

2649378

6.7

15626

20.6

3460

15.0

2001

2537282

-4.2

15083

-3.5

3198

-7.6

2002

2384364

-6.0

15064

-0.1

3103

-3.0

2003

2726214

14.3

20729

37.6

4463

43.8

2004

3457477

26.8

27944

34.8

6170

38.2

2005

3918610

13.3

33123

18.5

7493

21.4

2006

4447167

13.5

39025

17.8

8634

15.2

2007

5081504

14.3

44360

13.7

10729

24.3

2008

5366966

5.6

50730

14.4

11747

9.3

Source: Ministry Of Tourism India (2009).

Medical tourism has now become one of the developing concepts whereby people from foreign countries come to India for medical treatment and relaxation. Major surgery treatments include Heart surgery, Plastic surgery, transplant surgery, Cosmetic surgery and Dental care. Patients from all

Hospitality and tourism industry nowadays has become one of the large and essential industries that contribute to Malaysian economy. With more and more jobs on offer, hospitality and tourism industry are among the growth industries in the world. The Malaysian Department of Statistic has reported that Labor Force Participation Rate (LFPR) in tourism industry is 7.4%. So, this indicates that workers participation in this industry is quite high and same important with other industry in Malaysia. Hospitality and tourism industry has grown from the days of the late 80’s until 2012. Hospitality is between guest and host and a service that includes in terms of accommodation, restaurants, event planning, casinos, catering, resorts, theme parks, transportation, cruise line, and additional fields within the tourism industry. Each unit hospitalities like hotel or restaurant has its own management as waiters, receptionists, cleaners and others. However tourism can be define as the leisure, business purpose and also the recreational time for people that need rest.

In Malaysia, statistics show foreign tourists come to Malaysia increased from year to year. As in 2009, foreign tourists coming to Malaysia is 23.6 million while in 2010 it rose again to 24.6 million people. For 2010, Malaysia earns the profit of MYR57bn of the total expenditure from foreign tourists. In 2011 Malaysia had recorded a total of 24.7 million foreign tourists came to this country and it showed a slight increase from 2010. Revenue from foreign tourists, this country has been incurring a total MYR58bn in 2011. Malaysian Association of Hotels (MAH) was established in the year 1974, it is intended to further enhance hotel service and this also show Malaysia government take a serious action in attracting foreign tourists to come and show this industry will become one of important industries contribute to national economy. Par with the current technology, the government has implemented a development plan and the progress of the hospitality and tourism industry, it also includes the improvement of the hotel industry in Malaysia.

Hotel industry is booming in Malaysia, especially in places that have an attraction to tourists, such as in coastal areas and historic sites. Malaysia is famous for its country has many islands such as the island of Langkawi, Redang Island, Perhentian Island and others. Focus area for foreign tourists is in Malacca, because Malacca have many places to visit as well as the history of the formation of this country is in Malacca. Referring to the hotel industry in Malaysia, the rapid development in every state has led the industry also be involved, it is expanding from time to time. In the Klang Valley area, there are hundreds of hotels for tourists, it is made up of budget hotels, 3 star hotel and above. Among the famous hotels around the klang valley between them is Concorde Hotel Shah Alam, Quality Hotels, Holiday Inn Hotels, Hilton Hotels, DePalma Hotel, One World Hotel, Sunway Resort Hotel & Spa and more. There are various facilities provided by the hotel such as a gym, swimming pool, spa, family karaoke, bar, technology center and convention rooms. It is because around the hotel there are interesting places to visit for tourist such as KLCC, KL tower, National Museum, I-City, Sunway Lagoon and luxury shopping complex. These places have attracted tourists to come to Kuala Lumpur and Selangor. The state government said the influx of foreign tourists promote the construction and hotel to cater for the undertaking of these tourists.

Existing hotel needs many people to manage and provide services that are consistent with the objectives of the hotel. A hotel 3 star hotel and over has more than 50 employees to ensure smooth running of the hotel management. The problems was faced by the hotel management is about worker turnover. This is raises worries to all hoteliers. So, this research is conduct to study and examine the antecedents of workers turnover in hospitality and tourism industry in Malaysia specifically in the area of Klang Valley. After make some reading and analysis from previous study, it is found that there are some factors influencing to this situation which is worker turnover. Remuneration system, job satisfaction, incentives and working conditions are considered as the determinant. However, the concern and attention of this study is the most important factors that influencing to workers decision to come in and out from the industry.

1.2 Problem Statement

Currently, hospitality and tourism is one of the world biggest and fastest growth industries especially in Malaysia. This industry offers vast job opportunities but still have problem of worker turnover, there are many factors that contribute to workers leaving their work. The problem to be analyzed in this research will be the reasons on workers are turnover. It is surprising given that hospitality and tourism industry has been characterized in terms of high turnover rates, a part-time and causal workforce and an absence of the internal labor market (R.D. Iverson). Estimates of average annual employee turnover range from around 60 to 300 percent (B. Ronra).

1.3 Purpose of study

Each of research and study should have their own reasons and purposes. The purpose of this study is conducted in order to gain more understanding of the relationship between the remuneration scheme, job satisfaction, and incentives with workers turnover rate happen to employees in this industry. The result derive from this study will show whether all the factors will effects to workers turnover in Hotel industry.

Research questions

Is there any relationship between workers turnover rate with the remuneration scheme given to employees in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the job satisfaction level among workers in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the working environment given to employees in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the incentives to employees in hospitality and tourism industry?

What is the most important factor that effect to workers turnovers rate in hospitality and tourism industry?

Research objectives

To identify whether workers turnover rate in hospitality and tourism industry can be effected by the remuneration scheme, job satisfaction, working environment and incentives.

To identify the most important factor that contributes to workers turnover rate in hospitality and tourism industry.

To suggest some recommendations for future study.

Research Hypothesis

A series of testable hypothesis were developed from the proposed research model, as shown below:

Hypothesis 1

Ho: workers turnover in hospitality and tourism industry was not influenced by

the remuneration scheme.

Hi: workers turnover in hospitality and tourism industry was influenced by the

the remuneration scheme.

Hypothesis 2

Ho: workers turnover in hospitality and tourism industry was not influenced by

the level of job satisfaction of employees.

Hi: workers turnover in hospitality and tourism industry was influenced by the

level of job satisfaction of employees.

Hypothesis 3

Ho: worker turnover in hospitality and tourism industry was not influenced by

working environment condition to the employees.

Hi: worker turnover in hospitality and tourism industry was influenced by working

environment condition to the employees.

Hypothesis 4.

Ho: workers turnover in hospitality and tourism industry was not influenced by

other incentives given to the employees.

Hi: workers turnover in hospitality and tourism industry was influenced by other

incentives given to the employees.

Significant of study
1.7.1 Policy maker

The result obtain can help policy maker (government) to make a needed action to any problem incurred in labor force participation especially in hospitality and tourism industry.

1.7.2 Hospitality and Tourism industry

The result of this study can allow the management of hotel and tourism industry to understand more and also to be closer to the real situation about worker turnover issues. They also can implement any suitable action in order to improve workers arrangement in their management system.

1.7.3 Researcher

Researcher can understand deeply about the real situation in labor force. This knowledge is useful in future when this researcher enter the labor force and maybe he/she can provide own opinion and advice to his/her employer regarding worker turnover problem.

1.8 Limitations of Study

Every research will have own limitations. This study also has limit by some factors.

The limitation is as follows:

1.8.1 Population

First factor is population, as the sample is only focus to the respondents who works in the area of Klang Valley. This study may have different result or can be more strengthened if the sample area is enlarging to other hotel around Malaysia. A detail empirical analysis among variable that have multiple categories can be perform when the sample size is to be increase.

1.8.2 Lack of time

Next limitation in this study is about the time. There is about 5 months to complete this research and it will cause to the lack of time in order to collect more information and to properly prepare the full report for it. More time may provide with more detail and better research.

1.8.3 Lack of experience

Because this is the first individual research to the researcher, so the study will be conduct in the very minimum knowledge and lack many of experiences. It also may cause the researcher make many mistake further needs for corrective action.

1.9 Definition of term
1.9.1 Worker turnover

Cited in Minyen Ku, according to Phillips and Connell (2003) this term can be define as “the percentage of employee leaving the organization for whatever reasons”.

1.9.2 Remuneration

An exchange of service performed by employee in terms of monetary or also refers to as wages and salary.

1.9.3 Job satisfaction

Different perception felt by every employee of job that is entrusted, whether it is satisfied with the job or not.

1.9.4 Working environment

Factors that can determine an employee’s performance analyzed as physical environment, equipment provided, great facilities, materials used and others.

1.9.5 Incentive

The reward given by employer to his worker and example like a bonuses, holiday package, insurance cover and health care.

CHAPTER 2
2.0 LITERATURE REVIEW

Currently there is a lot of people come in and out of labor force. According to F.B Puteh (2011) every individual in their life will follow five main stage of career development. The first stage of the career development is starting in the age of 16 to 25 years old. At this stage an individual is trying to find a suitable job in labor force. It is followed by the second stage when that individual has chosen the best job and enters to any organization. Next stage of career development is begin when individual reach an age around 25 to 40 years old. In this stage, early career for an individual begin beside they try to adapt with the work environment and condition at this time. Further continue with the fourth stage when an individual start to put some effort and hoping for appraised by others people in an organization they work. However, at this stage there might be many things to happen and cause a workers turnover to be occurs. Last stage is the growth of the career until the day of retirement.

The Malaysian Department of Statistics has revealed in their latest report 2010, Malaysian total of population is stands at 27,565,281 (K.S. Chen, The Star 2011), with around 11,517 of them is in the labor force. In Malaysia, the tourism industry has been identified as the key driver in the growth of the service sector (Economic Planning Unit, Prime Minister’s Department, Malaysia).

2.1 Perspectives of worker turnover

The hotel industry is one of the sectors that contributed to the economic growth of a country. Throughout the world there are thousands of hotels antecedent labors. This is to accommodate the arrival of tourists from inside and outside the nation. However there is a problem faced every hotel management around the world is about worker turnover. Globally, the turnover rate in the hotel industry is estimated to range from 60 percent to 300 percent annually, far higher than the 34.7 percent reported in the manufacturing industry (Foley, 1996). Many organizations in the hotel industry face difficulties in retaining employees since they are unable to identify the factors that contribute to both employee satisfaction and loyalty (Rahman, 2011). Annual turnover rates as high as 50 percent remain the standard in the hospitality industry, and many hotel operations have chosen to simply accept this as a fact of doing business (Levine, 2005). According to Cornell University estimates, turnover in the hospitality industry averages more than 100 percent with the cost of turnover at about $5,000 per associate in lost productivity and wages (Davies, 2006). Effect of worker turnover included to all system or management of hotel industry. From the organisational perspective, employee turnover can represent a significant cost in terms of recruiting, training, socialisation and disruption as well as a variety of indirect costs the higher the turnover will caused more pressure placed on recruiting because it increase cost of training, loss of productivity plus its take time. (C.Y. Chang, 2010).

2.2 Perspectives of remuneration.

Every the job done whether related with the service, production, management, wages paid with, whether they are paid according to the hours worked or monthly. In the hotel industry, most workers are paid by the hour. If the wages paid to non-favourable, it can cause worker turnover. Remuneration scheme is one of the factors that will influence worker turnover in hotel industry. According to Jichul Jang, B.S (2008) the nature of hotel work such as labor intensive, low in wage, and promotion opportunities are limited will automatically increase worker turnover in hotel industry. Not worth it income or pay and also hours worked will be the strongly reason for hospitality and tourism industry will make worker leaving the organization (Pavesic and Brymer, 1990). ”Highest influencing factors affecting employees’ turnover was the insufficient tools and resources to do the daily job, followed by inadequate recognition and rewards for a job well done, the benefits received were not met with the employees’ needs, the salary and responsibilities were not compatible and the career path advancement was not compensate for lack of salary increase”, (Boondarig Ronra and Assoc. Prof. Manat Chaisawat, 2011). Moreover, based on Assoc. Prof .Cengiz demir , the reason why many employees quit the job because lack of wages. Most employers assume that higher workers turnover reflect of lower paying job and it if proved that workers turnover is very costly (Mobley, 1982).

2.3 Perspectives of job satisfaction.

According to M. M. Alam and Jamilha (2009) stated that job satisfaction is an attitude of an individual towards his jobs that extending to the feeling of different perception. Hospitality and tourism industry has face some difficulties in retaining and maintaining loyal employees since inability to identify the factors contributing to employee job satisfaction and loyalty (Rahman A. , et al 2011). Workers turnover is assumed related to the level of job satisfaction. Satisfied workers usually become more loyal towards their employer. Whether met or unmet, employees’ expectations of the job itself will influence their subsequent job satisfaction (Wanous et.al,1992). Knoop (1995) stated that job satisfaction is found to be a significant predictor of organizational commitment and also become an important factor to the intention of workers turnover. As cited in Boondaring Ronra the absenteeism and high workers turnover is reported to be related to job dissatisfaction level. While lower absenteeism is associated with high job satisfaction. The research also study and shows a consistent relationship between leadership support and job satisfaction which is also affecting employee turnover. Another element and factor to deciding job satisfaction is career motivation (Jichul J., 2008). Higher level of management should understand what motivates their employees in their jobs for the purpose of increasing job satisfaction and reducing employee turnover.

2.4 Perspectives of working environment

Since the hospitality and tourism industry is labor intensive in nature, the customer retention and defection are highly dependent on how the frontlines deal with customer (M. A. Hemdi, 2006). The employees feeling towards their work environment will affect the level of service they may provide (Yin.T. C, 2008). The more satisfied workers to the work environment are assuming to give and serve their customer better than those who are less satisfied. “Stress theories assume that individual can try to cope with the stress they are experiencing”, Desmette and Gaillard (2008). Workers usually have leads to leave their job if they feel uncomfortable. O’Reilly et al (1991) in their result revealed that employees will have reduced commitment and higher intent to leave if they do not fit the organization’s cultural requirement. According to Terry Lam et. al (2002) reduction of work – related stress, increase job satisfaction and motivation, and improve performance is normally reflected by a positive perceptions of workplace relationship.

2.5 Perspectives of incentives.

Incentives for employees go a long period of time in increasing the productivity and thereby lowering the worker turnover. Incentives for employees such as flex hours and/or telecommuting, health and wellness program, insurance package, paid holidays and relaxation, social and networking events and others. If hotel management not offers good incentives for their worker, it will make worker turnover to ensure their loyalty to the hotel. The manager should hold social activities as a reward to them, it was thus able to increase their loyalty to employees (Catherine, 2002). From the journal Executive White Paper, they said “turnover is less when employees have a high level of value for their work, these employees persist more than colleagues who report low levels of value, employers can help employees value their work through consistent praise, recognition, and special incentives”. A promotion is one of the best incentives to encourage employee’s loyalty. Moreover, promotions serve two rules in organization. First, they help assign people to the roles where they can best contribute to the organization’s performance. Promotion serves like incentives and rewards is a second rule (Fairburn and Malcomson, 2001). Other than that, if management unable to offer more money, so that give incentives is the best way to forced up the employees. Other word, incentives is benefit to the employees. The lot of benefit that management provided will make employees to stay. According to Heneman and Schwab (1985) defined benefits as most employees view or examine the benefits of a company given, it is not a form of money, but like insurance, health care, holiday package and so on.

CHAPTER 3
RESEARCH METHODOLOGY AND DESIGN
3.1 Research Model

The model examines the relationships of human decision in labor force which is workers turnover in hospitality and tourism industry with all the independent and moderate variables shown in Figure 1.

FIGURE 1
A SCHEMATIC DIAGRAM OF THE RESEARCH MODEL

REMUNERATION SCHEME

JOB

SATISFACTION

WORKER TURNOVER

WORKING ENVIRONMENT DEPENDENT VARIABLE

INCENTIVES

INDEPENDENT VARIABLE

MODERATE VARIABLE

As shown in Figure 1 above, the workers turnover in hospitality and tourism industry will be the dependent variable for this research is analyzed for the purpose of deriving the result and answer to the research questions. Meanwhile, the independent variable for this research is the remuneration scheme, job satisfaction also working environment. Incentives will become the moderate variable for this research.

3.2 The Data Collection

Because this research is about the perception among workers in the industry the data for this study will be gathered in November 2012 by using primary data collection method which is a self-administered questionnaire. The set of questionnaire will be passed around and distributing to selected workers in hospitality and tourism industry in different gender, age, race, education level and department only in the area of Klang Valey, Kuala Lumpur. An appropriate questionnaire will be constructing and distributing to all suitable respondent.

3.2.1 Primary Data Collection Method

A set of questionnaires adopted from the combination of several previous studies has been constructing. The first part of the questionnaires included five questions about the demographic characteristics of the respondents such as their age, race, gender and others and this part will be answered by using category scale which is by just ticking an appropriate answer. Further part including and will be ask in the questionnaire is Part B which is the respondent’s perception and own opinion about the most factor that contribute to workers turnover in the industry in Malaysia. The main part of questionnaire is part C and it can be use to measures and derive the result that we want to test in this research. Likert scale which is the range from 1 to 5 is to be use to answer this part. This section is also used to test the hypothesis and measure the relationship of dependent, moderate and independent variable of the research.

3.2.2 Secondary Data

This research is also completed by using a secondary data and it is use for identifying other problem. Secondary data is also used as references in the literature review. Useful information and needed data is also obtained from various journals, articles, research methodology and labor economics textbooks, economic bulletins, websites, brochures and newspaper.

3.3 Sampling Techniques

3.3.1 A snowball technique has been used and the total of 100 set of questionnaires will be distribute to respondent which is a workers that work in this hospitality and tourism industry in Klang Valley. The respondents will be comes from different level of department in order to get any different perception towards workers turnover. The distribution of questionnaire is specific to the respondent from the age of 15 to 58 years old, worked in Hospitality and Tourism industry, and they will come from different kind of race, age, gender education level and department.

3.4 Measures
3.4.1 Procedure for analysis

Further step of this research is to process the gathered data. All data will be key in and process by the software of SPSS to examine the frequency, mean, standard deviation and others. This is really helpful in order to get the most influential reasons contribute to workers turnover in the industry. This research also provides a descriptive and frequency table for all the demographic profile information in order to analyze the data. It is use to determine the types and characteristic of respondent. The value of Cronbach’s alpha will be deriving to test the consistency and reliability of this research. This method will ensure whether all the questions ask in the questionnaire is consistent and suitable. Correlation analysis is to be use for the purpose of deriving the positive or negative relationship and also the significant of all independent and moderate variables with the dependent variable. R- Square, F statistic and t- test can be performed by measuring the regression analysis. Using the Multiple Linear Regression and looking at the t -test of the analysis, the research hypothesis and the most important factor that contributes to workers turnover can be determined

Tourism in Kenya dates back to pre-independence days and as recorded in history as early as the 1930’s (Tourism in Kenya). In the early days the bulk of the tourist that visited Kenya did so mainly to take part in the gaming industry in the game – hunting expeditions, while the other were the typical old tourist that travelled for Sun Sea and Sand which is one of the tourism products offered by Kenya’s tourism industry.

In the early days the tourism industry in Kenya attracted first world rulers e.g. The queen of England, Queen Elizabeth II and the President of the United States of America Theodore Roosevelt.

Infrastructure

As expected the infrastructure that was available in Kenya in the 1930’s was less than ideal or/and adequate to facilitate the new growing trend in Kenya which was tourism, never the less the tourism industry was steadily growing. Kenya gained independence in December 1963 (Kenya Timeline) after that time the infrastructure also grew but it is still said to be in an extremely poor state.

The infrastructure includes:

Electricity

Telecommunications

Roads

Transport

The government has urged the public and private sector to work cohesively to achieve an infrastructural development in the country, which would ultimately develop and increase the tourist arrivals to the country.

Kenya’s tourism is heavily comprised of natural attractions. It is stated that approximately 10% of the country has been reserved for the preservation of the natural attractions and wildlife (Tourism in Kenya)

The tourism industry has evolved with the emergence of the new tourist, which brought along new forms of tourism for the country; it include Domestic Tourism, Community and Eco Tourism, Cultural Tourism, Business Tourism and Sport Tourism.

Eco tourism is the prevailing form of tourism for in the country with the 10% dedicated by the government for its natural reserve

Kenya Eco tourism attractions:-

Game viewing expeditions (Flora) – This form eco tourism can be linked to the Pre-independence day, where the old tourist travelled for the hunting of the game and Sun, Sea and Sand, with the evolution of the new tourist this has brought along the new game viewing expeditions, where the tourist no longer hunt the animals but view the animals of the country on a Safari. The country has its popular animal attractions which are now commonly called “the big five” that include the popular:

Elephant

Rhino

Lion

Buffalo

Leopard (Tourism in Kenya)

Plant watching (Fauna) – The tree and flowers watching tourism in Kenya is jointly part of the Kenyan agricultural industry, which is the main contributor to the Kenyan GDP. Kenya climatic seasons are similar to those in the Caribbean with a dry and rain season annually. The rainy season in Kenya is responsible for the boom in the fauna of the country. This is the season where the trees and flowers bloom whereas the dry season is quite different. The trees drop their leaves and the flowers dry up. A tourist that visits Kenya in the dry season would have a different experience to a tourist that visit in the rainy season in regards to the country fauna.

Safari – A safari is another natural way to enjoy the natural aspect of Kenya while understanding the native people and observing their natural lifestyle. The safari is also a main way to enjoy the game viewing expeditions through Kenya’s forest reserve.

Economical Factors

Multiplier Effect – The tourism industry is heavily dependent on other industries in Kenya to be a successful industry that caters to its tourist. A main dependency of the tourism industry is the agriculture industry. The agricultural which is predominantly responsible for the food and beverage industry that provides the food that is being served to the tourist. Other industries include the: – Textile, transportation and entertainment industries. A multiplier effect is very evident within the economy, to sustain the other industries, the tourist dollar is extremely important to the country.

Tourism Employees – Kenya’s tourism industry caters to the employment of 500,000 Kenyans (National Geographic 2010). These Kenyans have positions in the tourism industry ranging from the service e.g. Tour Guides for Kenya’s ever growing Game industry and Safari to the management sector in hotels and Tour Operators.

Negative Factors Affecting the Tourism Industry

Lacks of awareness of the people – The people of Kenya are never included in the decisions brought about from the government and private institutions to the development of the Kenyan tourism as a product. Negatively this would prompt the nationals to act negatively towards the tourist and encourage them to deface the infrastructure of the country, this could also prompt them into vandalizing the belongings of the tourist.

Socio-culturally – With the improvement in the tourism industry and the influx of tourist into country brought along the ways and attitudes of the new world, negatively this has impacted on the culture by, the increase of prostitution, lack of traditional rites and performances etc.

Terrorism Threat – The bombing of the US Embassy in 1998 and attempted bombing in Mombasa 2002, has prompted countries to issue negative travel advisory to Kenya which negatively affected the tourist arrivals to the country as depicted in the statistical data.

Kenya is a country with a diverse range of tourism products that cater to many types of tourism as mentioned previously. The country is heavily focused on maintaining its natural aspect as well as developing in a sustainable manner keeping with its eco tourism trend as it foremost tourism product. Overall the tourism industry is slowly increasing despite the negative factors that thrown them they were able to increase and move on.

Travel agencies exist mainly as intermediaries among suppliers of travel services such as carriers and hotels, and customers. Travel agencies do not deal with tangible products but with information where it is different from other distributors in many industries (Cheung & Lam, 2009). As for the travel agent it is best defined as an individual who undertakes a work for another individual, who is being the ‘principal’. The principal in such an affiliation not only sets the aims of the work, such as selling tickets, however can also control the means and way in which the work is completed (Cheung & Lam, 2009). Cheung & Lam (2009) added that modifications in the business over the past ten years have affectedly changed the environment and significance of info in the travel industry and, subsequently, the role of travel agency.

Lately, the technology advancement has brought changes in tourism industry. Why did the Internet so affectedly affect the travel industry? What impact do the changes have on travelers? (Harrell Associates, 2002). The Internet has revolutionized the method in which customers make their travel choices (Anon, 2012). Customers nowadays have several additional selections because the Internet offers providers additional chances to generate direct customer relations and allows a varied range of pricing (Harrell Associates, 2002). The Internet offers an influential atmosphere for the conception of virtual representations of tourism destinations permitting indirect experience that really exceeds the potentials of traditional travel agents (Bogdanovych, Berger, Simoff & Sierra, 2005). Currently the Internet is the perfect connection among customers and dealers, over hundreds of websites, travelers have sufficient information for their travel preparation (Ortega, 2008). According to Travel Industry Association of America (TIA) over 75 million online travelers used the Internet for their travel planning such as to look for places to stay, rental car prices, also searching for maps and driving directions, searching for airfares and schedules and other information about tourist destinations (Ortega, 2008).

According to Ortega (2008), he said that the travel planning and booking on the Web are among the greatest popular online activities in best important e-commerce markets and online travel sales are rising at an explosive amount (over $115 billion this year) in the US, Europe and the Asia-Pacific regions. Therefore, because of the growing of the e-commerce in the tourism industry, the tourists have numerous selections provided by the Internet to obtain online, in the ease of their houses or offices, touristic services and products (Ortega, 2008). Furthermore, the Internet assists to locate low prices in tourist services such as air tickets and hotel rooms. In conclusion, it offers tourists a remarkable total of information to make an exclusive trip.

According to Vrana (2010), she claimed that a main forte to travel agencies is the capability to offer personal information and assistance to tourists endlessly, along with consultancy service for corporations and will keep on secure if their advice-offering ability remained supported by the existence of the Internet. Even though there are many online travel services, a traditional travel agent is as far a vital part of the trip as ease is to traveling! (Will, 2012). The travel industry is comprised of over a dozen related industries: airlines, restaurants, hotels/motels, travel agencies, gift shops, auto rentals, and a host of other businesses that may not be even recognized their dependence on travel and tourism since travelers are usually indistinguishable from local customers (Cheung & Lam, 2009). Will (2012) also stated that, the part of a travel agent has remained growing with the eras and currently most people are reliant on them for fulfilling most of their travel plans so that they can rest calmly and just relish their trip.

This study aims to examine the factors involves in sustaining travel agency’s operation in order to survive in this tourism industry and evaluate their performance or sales of travel agency that can affected by the uses of technology such as Internet.

1.1 RESEARCH ISSUES

Tourism has become the second largest economy contributor after manufacturing. One of the factors that contributes to the boom of tourism market is the advancement of technology. Travel industry are comprises of variety related industries, such as airlines, travel agencies, restaurants, hotel/motel and more (Cheung & Lam, 2009). More or less, each of the related industry will get at least a little impact from the technology advancement, notably these travel agencies. There is some research that indicates that tourism product is popular to be bought through online (Nysveen & Lexhagen, 2001). Online tourism has grown rapidly as the consumer nowadays are using the advancement of technology to acquire information and also purchasing tourism products and services (Dixit, Belwal & Singh, n.d).

There are many reasons why consumer tends to choose Internet as one their medium in purchasing tourism product and services. One of it is Internet are giving them cost-saving convenience (Cheung & Lam, 2009). Cost-saving convenience means that there are no efforts required for the consumer to spend their time and money to seek for information needed about a certain package. Some of the consumers also choosing Internet rather than looking for travel agencies because of the flexibility that Internet has to offer. The consumer are seeking flexible tourism product to suit their travel needs (Harris & Duckworth, 2005). Based on their research, the consumers buying pattern recently has change rapidly to independent travel from the typical package holiday. To support this statement, they are adapting a research done by Mintel, in UK independent travel has conquered the travel market in 2004 with 55%.

The other reason why consumers tend to choose Internet over travel agencies is because of online experience has greater potential in visualizing travel destinations (Bogdanovych, Berger, Simoff & Sierra, n.d). They also stated that online technology offers 3D interactive tours that can deliver clearer image on the destination. Interactive videos can also be shown online without interrupting other customers. Based on a study done by Daugherty, Hairong & Biocca (2005) which they wanted to get consumers reaction on the product presentation method. The two choices are indirect experience (virtual presentation), and direct experience (direct product manipulation). The results proved that, product knowledge and decision quality made by the consumer are both significantly higher when they are exposed to interactive 3D products than to static products presented in a form-based way.

Despite from all the factors, travel agencies which are at stake need to survive in order to sustain their spot in the travel industry. They have to differentiate themselves more than what technology advancement has to offer. Based on the statement of research problem, we want to conduct a research on how travel agencies can sustain their operation. There are a few factors that make travel agencies can sustain themselves in tourism industry in Malaysia. These factors can determine the sales of the travel agencies because the trade travel agency community has sustained substantial losses due to the mutual effect of the growth of Internet (Cole, 2009)

1.2 STATEMENT OF RESEARCH PROBLEM

Generally, in real world, an increasing competition from other channel had caused the number of traditional travel agents nearly decrease (Buhalis, 2003). The Internet is changing the industry’s structure and the consumer’s behavior. Widely used of technology in tourism industry has affect the operation of the travel agencies in Malaysia. The usage of Internet by travelers has decreased the number of travel agencies’ sales in Malaysia. Besides that, Internet also has caused the high street travel agencies to close, thus creating job losses within the businesses (Anon, 2010).

Many studies have looked into The Internet Travel Industry: What Consumers Should Expect and Need to Know, and Options for a Better Marketplace (Harrell Associates, 2002), Travel Agents vs. Online Booking: Tackling the Shortcomings of Nowadays Online Tourism Portals (Bogdanovych, Berger, Simoff & Carles Sierra, n.d), Evaluating the Adoption and Use of Internet-based Marketing Information Systems to Improve Marketing Intelligence : The Case of Tourism SMEs in Jordan, AL-allak, 2010), Attitudes Towards Internet Use Among Travel Agencies In Greece (Vasiliki, Costas & Savvas) and Travel Agents Fight A Losing Battle With the Internet (World Airline News, 2008). Unfortunately, there is no specific study that evaluates or observes on the factors that lead to the methods of sustaining the travel agencies operation in Malaysia regarding on the technology advancement.

1.3 RESEARCH OBJECTIVES

1) To identify the factors that capable to sustain the operation of travel agencies in Malaysia

2) To identify whether the performance or sales of travel agency are affected by the uses of technology such as Internet or not.

1.4 RESEARCH QUESTION

1) What are the factors that can sustain the operation of travel agencies in Malaysia?

2) Does the performance or sales of travel agency are affected by the uses of technology such as Internet?

1.5 CONCEPTUAL FRAMEWORK

Independent variables Dependent variable

Sustainability factors:

aˆ? Human Touch

aˆ? Negotiation Power

aˆ? Interpersonal Skills

aˆ? Niche Market

Travel agency’s operation

Figure 1: Proposed framework for the study

1.6 SCOPE OF THE STUDY

The scope of the study is using the travel agencies around the Klang Valley area. All the travel agencies that took part in this study offers wide-range of services and products in their company. These travel agencies have been selected according to their location that located in Kuala Lumpur and Selangor. Most of the travel agencies are located in Kuala Lumpur.

1.7 SIGNIFANCE OF THE STUDY

This study will basically benefit few categories of organizations that play important key roles in the tourism industry. Firstly, the government bodies such as the Ministry of Tourism, Tourism Malaysia and travel agencies in Malaysia. Secondly, this study will benefit the educational institution especially academicians and students in the tourism line. Therefore, it is hoped that this study can act as a guide and reference in future studies. There might be some filed in this study that is not investigate thoroughly due to constraint of time and funding and therefore it is welcome for any future researcher to examine those intended field.

1.8 LIMITATIONS OF THE STUDY

For this study, we were using online survey. In order to deliver the questionnaires, we need to use an email. We took the email address of travel agencies from MATTA website, MOTOUR website and also their own website, however, some of the emails are not valid. This problem leads to the difficulty in collecting the information and giving us some difficulties in processing the result. Other than that, some of travel agencies did not give cooperation to us. They were not answering the questionnaires even though we already stated that all information are confidential and only use for study purposes. Lack of the cooperation and resources limit the researchers to gain extra information to enhance the study.

1.9 SUMMARY

This chapter has presented the background of the research and research problem, outlining the research objectives and questions relevant to the research topic. This chapter also covered the scope of the study together with the importance in conducting the research.

CHAPTER 2

LITERATURE REVIEW

2.0 INTRODUCTION

This study aims to discover the factors that can make the travel agencies in Malaysia sustain its’ operation in this tourism industry. In order to achieve the objectives of the study, literatures regarding the sustainability factors will be examine.

2.1 HUMAN TOUCH

According to a professor of psychology, Dacher Keltner from a University of California, Berkeley, he says that, touch is “our richest means of emotional expression”. The researcher found out that, touch interconnects in ways that words cannot (Moll, 2012). In retail store settings, concisely touching customers has been shown to rise the consumers’ shopping times, store valuations and purchase volumes (Lynn, Le, & Sherwyn, 1998). According to Jochman (2009) in his article title ‘The Benefit of Human Touch’, he said that the quantity of body contact plays an important role in people’s physical growth and mental as infants and in our happiness as an adults as shown by the scientists. Human touch has experience of working with banks, credit unions, insurers and other financial service providers to increase awareness of how service excellence can have a dramatic impact on their bottom line (Anon, 2012). A service representative asking the right questions and being sensitive to a customer’s needs can make all the difference between the sale of a financial product and the loss of that business to a competitor (Anon, 2012). In the years of computer-generated workplaces, where e-mail, teleconferencing and fax machines increase, something is missing that American business people need to close a deal the human touch (Seaberry, 2000). In other words, handshake and looking at each other’s eyes are still needed by the business people.

According to James J. Green (2012) in his article, he said that the personal touch-the person-to-person touch-that you offer to your clients the one that distinguishes you. He added that talking to your peers, in person, provides you with perceptions that you cannot get electronically. Individuals play an important role in any business relationship because it is actually managed by individuals (Nguyen & Nguyen, 2011). In manufacturer-distributor relationships, personal interactions talk about the communication at the individual level between distributors and manufacturers’ vital contact people (Ulaga, 2003). Furthermore, research has shown that personal interaction can play a critical role in distributors’ valuations of suppliers’ performance (Ulaga, 2003). As said by Kaufman (2012), automation is vital for growing and speeds up service in many industries. However, he added that when individual care or courtesy is required, customers require contact with real people. Once human energy flows and connects, good things can get completed and you can increase customer experience to your advantage (Kaufman, 2012).

Scholars in marketing and organizational behavior are present giving increasing attention to the personal interaction among the customer and the employee on the frontline of service businesses (Mattsson, 1994). The personal interaction is recognized to be one of the important subjects in business and industrial marketing, both in terms of practice and theory (Mainela & Ulkuniemi, 2012). Mainela and Ulkuniemi (2012) also stated in their journal that, personal interaction is also required to exchange social values and it may weaken the involvement of price in determining the behavior of the two parties. According to Pinnington and Scanlon (2009), business relationships are actually managed by individuals and there is extensive personal interaction in any business relationship (Pinnington & Scanlon, 2009). Research has shown that a lot of companies are moving from transactional separate relations to relational ones (Nguyen & Nguyen, 2011). In addition, Tho D. Nguyen, Trang T.M. Nguyen (2011) said that, committed relationships are among the most durable because they are difficult for competitors to comprehend, to duplicate, or to relocate. Thus, scholars and practitioners have agreed that two-way relationships between buyers and sellers represent a source of competitive advantage (Nguyen & Nguyen, 2011).

Travel agent might look similar to a profession of the past, just like elevator operators and milkmen, however they are not merely hanging on, certain of them are successful. In actual fact, the February/March topic of Shop Smart magazine has a story on travel agents, saying that they are a lot better than online travel services (Williams, 2008). In the article title ‘Travel agents: Hong Kongers prefer the real thing’, Hong Kong travelers blame the online trend and continue to choose for humans when booking vacations (Li, 2012). Li (2012) also said that, Hong Kong is not a huge city; it is appropriate for people to make straight contact with travel agents as they are the expertise and backing that an offline travel adviser can convey additional value to the holiday. Travel agents will make sure that you will have an incredible experience on your trip. They are excited and will show their enthusiasm in helping you, their clients, have the best vacation possible (Bow, 2012). Travel professionals are individually invested in seeing your trip come to be a success trip. This personal interaction with existent, live agents undermines the frequent dull experience of doing it yourself online (Bow, 2012). As soon as you book a trip or a holiday with a travel agent, you create a personal as well as a business rapport with that travel agent. If something goes incorrect, your travel agent is your personal representative who has an entrusted concern in resolving the problem to your satisfaction (Morris, 2012). According to Geoff Williams (2008), if you are afraid that you will need to change your flight or your travel plans at the last minute, a travel agent might be capable to talk to an airline directly and will save you away from those worries and stresses.

Even though growing numbers of people turning to technology, specialists on both sides of the bureau are saying that there will always be a space for the human touch (The Syedney Morning Herald, 2007). Wherever travel agents remain incomparable is in their capability to offer a personal service. Naisbitt (2001) refers to it as ‘high-touch’, the antidote to ‘high-tech’. Moreover, it is becoming increasingly evident that agencies will need a ‘high-touch high-tech’ strategy to satisfy the customers of the future (Naisbitt, 2001). A website cannot provide what the travel agent can offer such offering help, advice and also that “personal touch” to your travel planning experiences (McNally, 2007). According to the technology advisor Mary O’ Haver, the experience that travel agent has is part of the personal touch that travel agents can offer. Besides that, according to Hoffman (2012) who is an online travel expert and managing director of the world’s largest online travel agency, expedia.com.au, people will always like to walk into a store and get personal service. He also said that, the more complex the trip, the more cooperative an experienced agent will be. He continued that, an agent can guide an inexperienced traveler over foreign travel or travel to exotic destinations. When travel in less developed tourism destination, the travel agents may have more knowledge of travel about that destination (Morris, 2012). Complicated arrangements like various destinations on one ticket or group travel might turn into difficult and an agent with experience can help (Morris, 2012).

According to Olmsted (2012) in his article, between the several main advantages of high-powered agents carry to the table is individual connections and influence. If you have problems while you remain away, your travel agent is there to help you in resolving your concerns. If you make a booking with a travel agency, you are less likely to experience flight, city, or accommodation changes by the tour company, as they know the agent will be there to stand behind you (Travel Cafe Inc, 2012). If you have at present reserved your trip but before you go to travel you want to adjust some details, your travel agency can assist you by get all the required steps complete, leaving you without the difficulty and confusion (McNally, 2007). Travel agencies take care of all travel particulars form reserving tickets to booking hotels that can give the tourist sufficient time to plan the travel (McNally, 2007).

According to Donvan & Lieberman (2011), the human touch that makes travel agencies different is when something goes wrong with our trip; we have someone to call or refer to solve the problem. Compared to persons who booked their accommodation or flight tickets online, there was no one for them to refer to help them resolve that situation. Secondly, according to them, travel agents are giving services by giving real information or their personal experience on the destination spots they send people to. They can also give travel tips that maybe useful where we cannot get them from online information. If a person booked online, if there is any mistakes happen during their bookings, they will have to carry the burden for themselves. But, using by the travel agents, they will do anything in order to personalize the needs and wants of their customer (Travel Cafe Inc, 2011). Besides that, the travel agents are giving their specialized expertise that an individual does not have, or might forget during a trip. For example, visas, insurance, currency exchange and also custom regulation of a destination (Cole, 2009). Travel agents can help you to arrange and organize any compulsory official papers that you possibly will need in order to travel outside of the country (McNally, 2007). Rand McNally (2007) added that, travel agents know the necessary documents that you may need for your traveling such as visa and they can direct you to your local passport office too. Furthermore, travel agent can give extra services that an individual cannot get from online booking. One of the example is they have the ability to source and different travel experience and help to book hard booked restaurant (Talwar, 2011). Other than that, when you call with any problems during your trip, an online travel agency is not going to pick-up the phone but then a travel agent will remains to give you that personal care even though you are away (McNally, 2007). Building that personal relationship provides you the assurance that you can reliance on your agent’s expertise and no matter the situation, they will be around to assist you to find a resolution (Bow, 2012).

Additionally, if you should have any enquiries after booking your trip, you know exactly how to contact your travel agent and can escape the uncertain FAQ section on a website (McNally, 2007). The services that serve with the human touch and worth deal will make the travel agency retain in the business. According to Geoff Williams in his article, he said that as soon as the tourism space getting bigger, you are going to have a choice in the middle of a thinking, helpful individual and a capable unfeeling internet site that does not surely care if you travel on Saturn whereas your baggage bursts into flames on Mercury. As for that, who are you going to trust? Smart Money magazine summarized the whole thing moderately well on the cover of the June 2007 edition. “FORGET ONLINE! TRAVEL AGENTS GET BETTER DEALS”.

2.2 NEGOTIATION POWER

In general, negotiation mean bargaining process between two or more parties seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict (Business Dictionary.com). According to Fisher & Ury in their book Getting to YES: Negotiating Agreement without Giving In, negotiating is a basic way in getting what you want from other people (1981). While in Oxford Dictionary, negotiation means discussion is aimed at reaching an agreement. In Women Are Getting Even (WAGE) website, they interpret negotiation as conversation between two parties in order to make an exchange. According to Rusk (2006), the meaning of negotiation is “discussion intended to produce an agreement”. It also can be referring as common solutions that used to make a decisions and settle down the problems (Moore, 2012), a process which is two or more parties attempt to agree on the rate of goods and services that they exchange (Robbins & Judge, 2003). Conflict and negotiation are a fact of everyday work-life, yet it often produces anxiety (Cutts, 2012).

The UK Border Agency has announced that there are still technical problems with online booking service (Kelly, 2012). This statement shows that sometimes online booking faced a problem such as lost record (Kirschbaum, 2009), security issues (Fane, 2010) and technical issues (Scoot, 2012). There are problems that faced by customer when they used online booking system. Despite the fact that all the respondents (except for one) use computers almost every day, 14% believe that booking online is not securing in general (Bogdanovych et al, 2006). Conflict happen because of these problems. Conflict happen when people did not agree with the issue, it will create a friction or tension between that individual or groups (Nahavandi, 1999). Negotiation is a process that examining the facts of situation, exposing the interest of both parties involved and bargaining to solve the conflict as many as possible (Moore, 2012). Negotiation permeates the interaction of almost everybody in the organization (Robbins & Judge, 2003). According to Lucas (2008), conflict might occur because of differing perception, inadequate or poor communication and also contrary expectations. These problems often happen when dealing with customer especially in travel agency. In tourism industry, negotiation is an important process to gain a mutual agreement of something, especially for the travel agencies. It is crucial for them to confirm what their customer wants and need. Through negotiation conflict between travel agency and customer can be reduced. Negotiating through areas of conflict can often lead to win-win situations agreeable to parties, reducing ill felling and conflict (Queensland Government, 2011). Travel agents have the negotiation power because they have maximum choice to offer to their clients (Travel Cafe Inc 2011). This means they have variety of choices that they can get from their travel suppliers and they can give us the best deal with best value of possible. Online booking lack of firsthand knowledge and rarely gives customer opportunity to speak with someone knowledgeable about service that they are booking (Morelock, 2012). The clients and travel agents can assists us to get what we need in our vacation and help us to get the best offer.

Online booking allows customer to make all travel plans on the Internet means they can do it any time of the day or night at home or while they’re on their lunch break at the office (Oakley, 2012). It is true when we are doing booking online we can make a booking everywhere and anytime, where it will be more convenient to us, but we cannot negotiate the price of the tourism product that we wish to book. If we are negotiating with travel agents, we have the chance to get lower prices as possible. Price negotiation usually occurs during purchasing of materials or supplies (Francois, 2012). For example, if a travel package to Cameron Highlands costs about RM300 for two nights, the clients can negotiate to get the lower price and finally they will get the offer around RM250 only. With negotiations, both parties will receive their own benefits and it is a win-win situation (Rusk, 2006). When customer asks an agent to negotiate, means customer are essentially asking the agent to subsidize their vacation (Brock, 2009) but through online system, customer had no change to negotiate with an agent because the price is fixed. The Marriott International, Hilton Hotels, Sheraton Hotels & Resorts and others was charged in San Francisco Federal Court on charges conspired to use their market dominance to fix the hotel prices with travel websites like Travelocity, Booking.com and Expedia, a subsidiary of Priceline.com From this case we can see that customer cannot negotiate the price because the price is fixed. The aim of the negotiations is to decide the price that is acceptable for both parties (Francois, 2012)

From price negotiation process it becomes bargaining process. Negotiations commonly follow a process of “positional bargaining” (Cutts, 2012). Oxford Online Dictionary give two interpretation of bargaining, the first is an agreement between two or more people or groups as to what each will do for the other. The second is a thing bought or offered for sale much more cheaply than usual or expected. There are two types of negotiation which are distributive bargaining and integrative bargaining (Robbins & Judge, 2003). Distributive bargaining also called claiming value, zero-sum or win-lose bargaining is a competitive strategy that is used to decide how to distribute a fixed resource such as money (Spangler, 2003). Honeyman (2012), interpret integrative bargaining as one of platform which party try to understand interests of another party, on the expectation that it will helping the opponent to create solution as responsive its own concerns. According to Tewart (2012), many times people say they don’t like to negotiate (bargaining) yet, they still shop around and never pay full price. The word bargaining here does not only mean price negotiation, it is a much differentiated and broader term (Management Study Guide, 2012). Customer also can bargain to build his or her own trip with or without help from a customer care executive (Agarwal, 2012), asking whether travel agency offer travel insurance (trip – Travel Responsibility Informed & Protected, 2012) and a customer can seek redress under certain circumstances commonly referred as the right to repair, replacement or refund (Government of South Australia, 2011). These are things that customer can always bargain with travel agencies.

The freedom for the customer is restricted when they make booking through online system. Customer cannot confirm their specific requirement when make the online booking through the hotel reservation system (Vyas, 2010). For example, when they make booking through hotel reservation system and they have something that they don’t understand, there is no place for them to raise the questions. According to Lloyd, booking online doesn’t have individual to deal with booking process, it leaf to customer to read and understand the complicated terms and conditions. One of the advantages of booking direct with the hotel, by phone or email, is that customer can request a specific room of the hotel and they cannot normally do that online or with an agent (Trend, 2010)

According to Tewart (2012), most people act in their best interest and most people who say they don’t like negotiating, actually still want to. This statement shows that customers still love to negotiate and online booking system prevent them from doing it. Negotiation is needed in order to secure the resources required for successful project completion (Evans & Lindsay, 2008). Through negotiating win-win solutions with customers, it will not only give your company the best chance to succeed but will also create relation between customer and your company for future sales opportunities (Douglas, 2003). Negotiation also can increase clarity about the problem, can lead to innovative breakthroughs and new approaches, involvement in conflict can sharpen approaches to bargaining, influencing, competing and also can focus more attention on basic issues and lead to solution (Wertheim,1996). Solving problems that arise in negotiations is an integral part of collective bargaining. The first task is to recognize what is the problem that occurs and the secondly, is to decide what strategy should be taken to solve the problem (Anon, 2012).

According to Goodale (2007), negotiation is one of the most important parts in business as well as one of the most interesting parts of professional purchasing